REPUBLIC BANK (GUY ANA) LIMITED ANNU AL REPORT 2012

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In celebrating 175 years of service to the people of the region, we have taken a

look back at our journey, at our successes and the steps we took to achieve

them. Our path, like any other in the field, has been met with challenges

and victories, each making us stronger in its own way. As the decades

have passed, Republic Bank has come to the firm realisation that our

solid foundation has remained as such through a steadfast commitment

to the needs of our customers, staff, shareholders and communities.

And in looking toward the next 175 years, we stand fast and true in our

belief that each individual has the ability to make a lasting contribution to the

overall good of the Nation. Guided by this belief, we will move forward, even more

focussed on those we serve locally and regionally, with the aim of building successful

communities and having a positive impact on our societies.

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VISIONRepublic Bank,

the Caribbean Financial Institution of Choice

for our Staff, Customers and Shareholders.

We set the Standard of Excellence

in Customer Satisfaction,

Employee Engagement, Social Responsibility

and Shareholder Value,

while building successful societies.

MISSIONOur mission is to provide Personalised,

Efficient and Competitively-priced

Financial Services

and to implement Sound Policies

which will redound to the benefit

of our Customers, Staff, Shareholders

and the Communities we serve.

ValueSCustomer Focus,

Integrity,

Respect for the Individual,

Professionalism and

Results Orientation.

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4 NOTICE OF MEETING

5 CORPORATE INFORMATION

6 BANk PROFIlE

8 FINANCIAl SuMMARy

9 FINANCIAl HIGHlIGHTS

10 BOARD OF DIRECTORS

12 DIRECTORS’ REPORT

15 CHAIRMAN’S REVIEW

17 MANAGING DIRECTOR’S DISCuSSION AND ANAlySIS

25 SENIOR MANAGEMENT

26 MANAGEMENT

28 POWER TO MAkE A DIFFERENCE

30 175TH ANNIVERSARy MIlESTONES

32 STATEMENT OF CORPORATE GOVERNANCE PRACTICES

34 FINANCIAl REPORTING REquIREMENTS

FINaNCIal

36 INDEPENDENT AuDITORS’ REPORT

37 STATEMENT OF FINANCIAl POSITION

38 STATEMENT OF INCOME

39 STATEMENT OF COMPREHENSIVE INCOME

40 STATEMENT OF CHANGES IN EquITy

41 STATEMENT OF CASH FlOWS

42 NOTES TO THE FINANCIAl STATEMENTS

Table of Contents

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aNNual MeeTING

NOTICE is hereby given that the twenty-eighth Annual General

Meeting of Republic Bank (Guyana) limited will be held at Pegasus

Hotel Guyana, Seawall Road, kingston, Georgetown, on Monday,

December 10, 2012 at 15:00 hours (3:00 p.m.) for the following

purposes:

1 To receive the Report of the Directors and the Auditors

and to approve the Audited Accounts for the year ended

September 30, 2012.

2 To re-elect three Directors to fill offices vacated by those

retiring from the Board by rotation in accordance with the

By-laws namely; John N. Alves, William H. Pierpont Scott

and John G. Carpenter.

3 To reappoint the Auditors, Messrs Ram & McRae.

And the following special business namely:

4 To consider and if thought fit, pass resolutions relating to:

a Dividends;

b Directors’ service agreements providing for their

remuneration; and

c Remuneration of the auditors.

5 To consider any other business that may be conducted at an

Annual General Meeting.

By order of the Board

Christine a. McGowan

Corporate Secretary

October 25, 2012

ReGISTeReD OFFICe

155 -156 New Market Street

North Cummingsburg

Georgetown, Guyana

NOTeS

• Onlystockholdersmayattend.

• Any member entitled to attend and to vote is entitled to

appoint a proxy to attend and vote instead of him/her.

• A proxy need not to be a member of the Company. The

instrument appointing a proxy must bear a G$10 revenue

stamp and be deposited at the Registered Office of the

Company not less than 48 hours before the time for holding

the meeting.

• AnyCorporationwhichisamemberoftheCompanymay,by

resolution of its Directors or other governing body, authorise

such person as it thinks fit to act as its representative at the

meeting (By-law 86).

Notice of Meeting

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DIReCTORS

Chairman

Managing Director – Republic Bank limited

David Dulal-Whiteway, BSc (Mgmt. Studies), MBA, CGA

Managing Director

John N. Alves, FICB

Non-executive Directors

Roy E. Cheong, AA, FCII, FLMI, CLU

Nigel M. Baptiste, BSc (Econ.) (Hons.), MSc (Econ.), ACIB

William H. Pierpont Scott, FCCA, CA

John G. Carpenter, BSc (Food Sciences)

Richard I. Vasconcellos

Derwin M. Howell, BSc (Elect. Eng.) (Hons.), Executive MBA,

MSc (Tele. Systems), MIET, MIEEE. C. Eng.

yolande M. Foo, AICB

Corporate Secretary

Christine A. McGowan, LEC (Hons.), LLB (Dist.), LLM (Merit), AMLCA

ReGISTeReD OFFICe

Promenade Court


North Cummingsburg

Georgetown

Guyana, South America

E-mail: [email protected]

Website: www.republicguyana.com

aTTORNeyS-aT-law

Messrs Cameron & Shepherd

2 Avenue of the Republic

Robbstown

Georgetown


auDITORS

Messrs Ram & Mc Rae

Chartered Accountants

157 ‘C’ Waterloo Street

North Cummingsburg

Georgetown


Corporate Information

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HeaD OFFICe

Republic Bank Promenade Court


North Cummingsburg

Georgetown, Guyana

Telephone: (592) 223-7938-49

Fax: (592) 233-5007


Website: www.republicguyana.com

SeNIOR MaNaGeMeNT

Managing Director

John N. Alves, FICB

General Manager, Credit

Patricia Plummer, FICB

General Manager, Corporate and Management Services

Denise E. Hobbs, Dip. (Business Mgmt.)

MaNaGeMeNT

Senior Manager, Corporate and Commercial Credit

Sasenarain Jagnanan, AICB, Dip. (Banking and Finance)

Manager, Branch Operations

Devan khemraj, AICB, ACCA, BSc (Applied Accounting) (Hons.), MBA

Corporate Manager, Corporate and Commercial Credit

Charles H. Bruton, BSc (Econ.)


Carla F. Roberts, BSc (Accountancy)

Manager, Finance and Planning

Vanessa A. Thompson, BSocSc (Mgmt.), ACCA, MBA

Manager, Human Resources

Anita Mohabeer

Manager, Corporate Operations

Denys Benjamin

Manager, legal Services

Christine A. McGowan, LEC (Hons.), LLB (Dist.), LLM (Merit), AMLCA

Manager, Marketing and Communications

Michelle Johnson, BSocSc (Mgmt.) (Hons.), PG Dip. (CIPR), MACC (Dist.), MCIPR

Manager, Branch Support Services

Celine Davis, ICB - Letter of Accomplishment, BSocSc (Mgmt.),

PG Dip.(Developmental Studies), MSc (HR Mgmt.)

Manager, Information Technology

yonnette Greaves, Dip. (Info. Services), LIMIS

Manager, Internal audit

Stanton Grant, BSc (Econ.), AICB

MaIN BaNKING OFFICe

waTeR STReeT OPeRaTIONS

38-40 Water Street

Georgetown, Guyana

Telephone: (592) 226-4091-5, 226-1691-5

Fax: (592) 227-2921

SWIFT: RBGl GyGG


Manager

Jadoonauth Persaud, Dip. (Banking and Finance)

OTHeR BaNKING OFFICeS

aNNa ReGINa BRaNCH

lot 8 Public Road

Anna Regina

Essequibo Coast

Telephone: (592) 771-4171, 4778, 4779

Fax: (592) 771-4085


Officer-in-Charge

Guitree Ramsamooj, CAT

CaMP STReeT BRaNCH

78-80 Robb and Camp Streets

Georgetown, Guyana

Telephone: (592) 226-4911, 223-7433, 226-7267

Fax: (592) 226-4846


Manager

Sherwyn Greaves, AICB

Bank Profile

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CORRIVeRTON BRaNCH

lot 5 #78 Corriverton

Corentyne, Berbice

Telephone: (592) 335-3351, 3354, 3376

Fax: (592) 335-3092


Manager

Harry Dass Ghaness, ICB - Letter of Accomplishment

lINDeN BRaNCH

101-102 Republic Avenue

Mc kenzie, linden

Telephone: (592) 444-6951, 6952, 6090, 6001

Fax: (592) 444-6008


Officer-in-Charge

Randulph Sears, Business Group Cert.(ICM), Dip. (Marketing), ACIM

DIaMOND BRaNCH

Public Road

Plantation Great Diamond

East Bank Demerara

Telephone: (592) 265-5731, 5737

Fax: (592) 265-5738


Officer-in-Charge

Joel Singh, AICB

New aMSTeRDaM BRaNCH

lot 6 Public Road

16 Strand

New Amsterdam, Berbice

Telephone: (592) 333-2633, 2639, 2706, 2215

Fax: (592) 333-3432


Officer-in-Charge

Imran Saccoor, Dip. (Marketing)

ROSe Hall BRaNCH

29 Public Road

Rose Hall Town

Corentyne, Berbice

Telephone: (592) 337-4300, 4500, 4550

Fax: (592) 337-4424


Manager

leon E. McDonald, Dip. Accounting (AAT), AICB, CAT

ROSIGNOl BRaNCH

31-32 Public Road

Rosignol Village

West Bank Berbice

Telephone: (592) 330-2219, 2680, 2683

Fax: (592) 330-2681


Officer-in-Charge

Joseph Downes, BSocSc (Mgmt.) (Dist.)

VReeD-eN-HOOP BRaNCH

27 ‘C’ Stelling Road

Vreed-en-Hoop

West Coast Demerara

Telephone: (592) 264-2367, 3106, 3107, 3108

Fax: (592) 264-2605


Officer-in-Charge

Shridath Patandin, AICB

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2012 2011 2010 2009 2008

Cash resources 23,280,892 16,392,343 16,577,891 16,265,080 16,525,468

Investment securities 5,957,434 7,187,075 8,855,437 11,197,128 11,493,650

loans and advances 38,631,805 32,814,345 28,305,627 23,302,210 21,586,811

Total assets 115,355,534 103,875,703 95,917,296 89,333,140 84,174,720

Total deposits 101,736,334 91,871,620 84,207,045 79,204,292 75,122,519

Stockholders’ equity 10,803,787 9,639,821 8,664,559 7,466,787 6,316,412

Net profit after taxation 2,012,936 1,928,364 1,982,092 1,821,457 1,559,697

Earnings per stock unit in dollars ($) 6.71 6.43 6.61 6.07 5.20

Return on average assets (%) 1.85 1.88 2.11 2.06 1.90

Return on average equity (%) 19.58 20.56 24.10 25.89 27.20

Financial Summary

All figures are in thousands of Guyana dollars ($’000)

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2012 2011 Change % Change

Statement of Income

Interest and other income 7,613,198 7,457,303 155,895 2.1

Interest and non-interest expenses (4,391,884) (4,281,873) (110,011) (2.6)

Net Income before taxation 3,221,314 3,175,430 45,884 1.4

Taxation charge (1,208,378) (1,247,066) 38,688 3.1

Net Income after taxation 2,012,936 1,928,364 84,572 4.4

Statement of Financial Position

loans and advances 38,631,805 32,814,345 5,817,460 17.7

Total assets 115,355,534 103,875,703 11,479,831 11.1

Average assets 108,689,460 102,673,318 6,016,142 5.9

Deposits 101,736,334 91,871,620 9,864,714 10.7

Equity (capital and reserves) 10,803,787 9,639,821 1,163,966 12.1

Average outstanding equity 10,280,755 9,379,170 901,585 9.6

Common Stock

Earnings in dollars per stock unit 6.7 6.4 0.3 4.4

Dividend for the year (in thousands) 875,000 850,000 25,000 2.9

Stock units (in thousands) 300,000 300,000 0.0 0.0

General

Number of:

Stockholders 1,199 1,194 5.0 0.4

Common stock outstanding (in thousands) 300,000 300,000 0.0 0.0

Active savings, chequing and deposit accounts 201,095 136,010 65,085 47.9

Employees 614 608 6.0 1.0

Banking offices 10 10 0.0 0.0

Financial Highlights

All figures are in thousands of Guyana dollars ($’000)

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David Dulal-whiteway, BSc (Mgmt. Studies), MBA, CGA

Managing Director, Republic Bank limited

John N. alves, FICB

Managing Director, Republic Bank (Guyana) limited

Nigel M. Baptiste, BSc (Econ.) (Hons.), MSc (Econ.), ACIB

Executive Director, Republic Bank limited

John G. Carpenter, BSc (Food Sciences)

Chairman, Hand-In-Hand Fire & life Insurance Group of Companies

Roy e. Cheong, AA, FCII, FLMI, CLU

Director, Guyana & Trinidad Mutual Fire Insurance Company limited

yolande M. Foo, AICB

Director, St Joseph Mercy Hospital

Derwin M. Howell, BSc (Elect. Eng.) (Hons.), Executive MBA, , MSc (Tele. Systems), MIET, MIEEE, C. Eng.

Managing Director and CEO, Republic Bank (Barbados) limited

william H. Pierpont Scott, FCCA, CA

Financial Director, William H. Scott limited

Richard I. Vasconcellos

Chairman, Carib Hibiscus Development

Board of Directors

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David

Dulal-Whiteway

John N.

Alves

Roy E.

Cheong

Nigel M.

Baptiste

John G.

Carpenter

Yolande M.

Foo

Derwin M.

Howell

William H.

Pierpont Scott

Richard I.

Vasconcellos

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Directors’ Report

The Directors have pleasure in submitting their Report and Audited Financial Statements for the year ended September 30, 2012.

PRINCIPal aCTIVITIeS

The Bank provides a comprehensive range of commercial banking services at ten locations throughout Guyana.

FINaNCIal ReSulTS

(in thousands of Guyana Dollars)

2012 2011

Net income after taxation 2,012,936 1,928,364

Interim dividend paid 275,000 275,010

Retained earnings 1,737,935 1,653,355

Final dividend proposed 600,000 575,000

DIVIDeNDS

An interim dividend of $0.917 per stock unit ($275.0 million) was paid during the year and a final dividend of $2.00 per stock unit ($600

million) for the year ended September 30, 2012 is recommended. This if approved will bring the total payout for the year to $875 million.

CaPITal aND ReSeRVeS

Capital and reserves other than retained earnings total $1,958 million as shown in the Statement of Changes in Equity.

Retained earnings at September 30, 2012 is $8,845 million (2011 - $7,926 million) after a transfer of $243 million to the General Banking

Risk Reserve, $850 million paid out as dividends (final 2011 - $575 million, interim 2012 - $275 million), and $2,013 million transferred from

the Statement of Income for 2012.

DONaTIONS

Donations to charitable or public causes for the year were $7.4 million (2011- $7.1 million), emphasizing the Bank’s strong social

investment policy.

SuBSTaNTIal STOCKHOlDING (uNITS OF STOCK)

A substantial stockholder for the purposes of the Securities Industry Act 1998 is one who controls five percent or more of the voting power

at a General Meeting. The following are the substantial stockholders of the Bank:

Number of Stock units Number of Stock units

2012 % held 2011 % held

Republic Bank limited 152,898,395 50.97 152,898,395 50.97

Demerara Mutual life 16,306,080 5.44 16,306,080 5.44

Assurance Society limited

Guyana and Trinidad Mutual Fire 15,798,760 5.27 15,798,760 5.27

and life Group of Companies

Trust Company (Guyana) limited 16,662,460 5.55 16,415,943 5.47

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DIReCTORS

In accordance with the Bank’s By-laws, Messrs John N. Alves, William H. Pierpont Scott and John G. Carpenter retire from the Board by

rotation and being eligible, offer themselves for re-election.

auDITORS

Messrs Ram & McRae, Chartered Accountants, have informed the Bank of their willingness to continue in office as Auditors. A resolution

proposing their re-appointment and authorising the Directors to fix their remuneration will be submitted to the Annual General Meeting.

CONTRIBuTION OF eaCH aCTIVITy TO OPeRaTING PROFIT

‘Banking operations’ is considered as one single business operation which includes lending, investments, foreign exchange trading and

deposit taking. The contribution or cost from these activities to operating profit is disclosed in the Statement of Income.

GeOGRaPHIC aNalySIS OF TuRNOVeR aND CONTRIBuTION TO ReSulTS

The Bank operates only in Guyana but several investments are held overseas for which income of $140 million (2011 - $160 million) was

earned during the year. Please refer to Note 21 of the financial statements for further information.

INTeReST OF DIReCTORS aND CHIeF eXeCuTIVe aND THeIR aSSOCIaTeS

Of these categories only the following persons held stocks in the company, all of which were held beneficially:

Number of stock units

2012 2011

John G. Carpenter 150,000 150,000

Roy E. Cheong 87,000 87,000

(75,000 held jointly with an associate, and 12,000 held by an associate)

John N. Alves 75,000 75,000

(held jointly with an associate)

yolande M. Foo 315,000 315,000

(held jointly with associates)

DIReCTORS’ FeeS ($)

2012 2011

Nigel M. Baptiste 1,560,000 1,440,000

John G. Carpenter 1,530,000 1,440,000

Roy E. Cheong 1,650,000 1,530,000

David Dulal-Whiteway 2,550,000 2,460,000

Derwin M. Howell 1,470,000 1,440,000

Richard I. Vasconcellos 1,320,000 1,290,000

William H. Pierpont Scott 1,500,000 1,410,000

John N. Alves – 700,000

yolande M. Foo 1,560,000 1,440,000

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Directors’ Report

DIReCTORS’ SeRVICe CONTRaCTS

There are no service contracts with the Directors proposed for election at the forthcoming Annual General Meeting, or with any other

directors, which are not determinable within one year without payment of compensation.

CONTRaCTS wITH DIReCTORS

Other than normal banking and employment contracts, there were no contracts between the Bank and its Directors or in which the

Directors were materially interested.

CONTRaCT OF SIGNIFICaNCe wITH STOCKHOlDeR

The Bank expended the sum of $81.41 million (2011 - $78.57 million) in fees (inclusive of Directors’ fees) and expenses under a Technical

Services Agreement with Republic Bank limited for the provision of management, credit analysis, internal audit and other services.

Technical Service fees are determined with reference to the Bank’s net interest and other income.

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The Bank recorded an after tax profit of $2.013 billion for fiscal 2012, reflecting a 4.4% growth

over prior year results. Earnings per stock unit also trended upwards moving from $6.43 to

$6.71. The Bank’s performance was achieved amid strong competition within the banking

industry and is a result of the implementation of sound strategies. The Board has recommended

a final dividend of $600 million ($2.00 per stock unit) which, if approved by stockholders at the

Annual General Meeting, will bring the total dividend for the year to $875 million (2011-$850

million), a total dividend payout of 43.47%.

economic Review

The widening of the Euro-Zone debt crisis in the latter part of 2011 coupled with the slowdown

in emerging markets undermined world economic growth, which was 3.8% in 2011 compared

with 5.2% in the prior period. On account of weaker economic growth, unemployment was high

at over 7%, though global consumer price inflation remains subdued after peaking at 2.75% in

2011 because of higher commodity prices.

Guyana’s Gross Domestic Product registered a growth rate of 5.4% for 2011 compared with

4.4% in the prior period due to a combination of high demand and commodity prices for major

exports. With a projected growth rate of 3.8% for 2012, Guyana realised a 2.8% growth rate

for the first half of the year, with mining and quarrying, along with the services sector (financial

and distributive trade), being the main drivers. Domestic growth this year was hindered by

underperformance in the sugar and forestry industries and the manufacturing sector. Inflation

for 2012 is projected at 4.6% but was contained at 1.8% in the first half of the year as a result of

a less-than-anticipated rise in food and fuel prices.

Transactions on the foreign exchange market increased by 13.1% to uS$3.2 billion, on

account of significant proceeds from remittances and proceeds from the export of gold and

rice. Exchange rates have remained very stable over the last decade, and this trend continued

into the first half of 2012, as a result of a net positive supply of foreign exchange in the system.

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Chairman’s Review

16

Chairman’s Review

Future Outlook

Sectorally, gold mining is expected to continue to make a significant

contribution to Guyana’s economic growth. Current buoyant prices,

increased output, improved interior road linkages and the increase

in land made available for mining are all contributing factors.

Bauxite will also continue to experience growth in production

due to higher demand for the grades of bauxite produced locally.

quarrying is poised to maintain steady growth as a result of

expansion in the construction sector, and continuous improvement

in domestic infrastructure.

Foreign Direct Investment in manganese mining and oil

exploration activities, along with large-scale gold and diamond

prospecting projects, hold additional hope for the continued

contribution of mining to Guyana’s gross domestic and foreign

exchange earnings in the coming years.

The services sector, which includes distributive trade, financial

services, information and communication, grew by 5.5% for the first

half of the year. Going forward, this sector is expected to benefit

from the commencement of work on extending the four-lane

access road to Diamond/Grove on the East Bank of Demerara, the

widening of the highway on the East Coast of Demerara, ongoing

construction and maintenance of the country’s infrastructure and

the continued distribution of previously held sugar lands to citizens

in the form of new residential housing schemes and commercial

zones.

The agricultural sector is also projected to continue contributing

positively to gross domestic product, foreign exchange earnings

and employment, albeit with constraints. The rice sector, currently

viewed as the most productive agricultural sector in Guyana,

with export earnings surpassing that of sugar over the past two

years, is projected to continue recording growth. Production

and export earnings are expected to further improve, due to the

stability and buoyant prices for rice and paddy in the Venezuelan

market, Guyana’s newest trading partner. The re-election of the

united Socialist Party in Venezuela is expected to ensure price

stability for rice/paddy and cheaper than world market prices for

petroleum products to Guyana, under the Petro-Caribe Initiative.

Sugar on the other hand, is expected to rebound, notwithstanding

the challenges of unpredictable weather conditions, along with

industrial action and factory-related issues.

Republic Bank (Guyana) limited remains committed to future

development in Guyana and the financial sector, as improvement

in the economic and political climate continues and there are

signs that an enabling environment for the Guyanese people is

evolving, gradually. The Bank expects to establish a new location

at lethem and commence construction of a new facility at Rosignol

during fiscal 2013, and will continue to examine the feasibility

of strengthening its presence in other areas/regions, as may be

deemed necessary to serve the populace.

acknowledgements

I take this opportunity to again thank management and staff for

their contribution to the success of the organisation over the past

year. I also extend my sincere gratitude to our loyal customers and

stockholders, acknowledge my fellow Directors for their continued

support, and look forward to working with them to ensure the future

success of the Bank.

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Managing Director’s Discussion and Analysis

INTRODuCTION

I am pleased to report that despite a challenging market environment both locally and abroad

the Bank’s performance has been solid and reassuring. For the year ended September 30,

2012, profit after tax improved by 4.4% to $2,013 million when compared to fiscal 2011. Earnings

per stock unit increased to $6.7 from $6.4 while dividends of $2.0 per stock is proposed

bringing the total proposed dividends payable for the financial year ended September 30,

2012 to $875 million. Our focus for fiscal 2012, was careful asset/liability management, close

control of operating expenditure, vibrant efforts to increase non-interest income and successful

strategies in expanding our credit portfolio.

Our success is attributable to our philosophy of custormer service, integrity, asset quality,

innovation and staff development which we firmly maintain through efficient monitoring of

processes. Our operating income remains strong and continues to grow. We remain hopeful

that the signs of improvement in Parliamentary Government will result in further improvements

in the economic and political climate.

The Bank demonstrated its strength by continued dominance in the market place as total

deposits grew by 10.7% to G$101.7 billion during fiscal 2012. We continued to be the Bank of

choice, financing worthwhile projects throughout the country thereby increasing our portfolio of

commercial and corporate lending by 11.8% and retail by 29.6%.

We are cognisant of the integral functions that are the foundation of what we do, and

made major strides during the fiscal in several areas to ensure our brand remains strong and

competitive in the market.

Customer Service

This aspect of our operation receives our ongoing attention as we strive for service excellence.

We appreciate that our customers and their satisfaction are crucial to our continued success.

In recognition of this, a number of projects and re-engineering exercises aimed at improving

their perception and efficiency are ongoing. In addition, we continue to be guided by feedback

John

N. A

lves

18


derived from our customer and staff focus groups. key among

our considerations/focus, and in keeping with global trends,

is automation, while we recognise that, just as important, will

be educating our customers on how best to capitalise on these

facilities.

We continue to maintain our leadership position in the

deployment of Automated Teller Machines (ATMs) and Point of

Sale (POS) terminals. As we move forward, our commitment is to

derive maximum benefit from the Bank’s investment in technology

and continue implementing new technological means towards

better serving our customers, and providing improved returns to

our stockholders. Republic Bank recognises the importance of

creating and developing good relationships in order to provide

value to our customers, and we affirm our commitment to total

Customer Care and resolving customer concerns within a

reasonable timeframe.

Human Resources

At Republic Bank we know that in order to provide the highest

quality service to our customers and enhance stockholder value,

we must develop our prime resource, our staff. We are consistently

reviewing our policies and practices to ensure that we nurture and

sustain an environment in which we can maximise the use of our

human resources. Our training activities were intensified during

fiscal 2012 with the focus being to ensure that staff at all levels

are exposed to requisite training to enhance our skill set. Our

team at the Training and Development Centre worked diligently

to first equip themselves with the mechanics of new techniques,

and related programme content was revised/updated, additional

sessions scheduled based on needs, and strategies reviewed

for effectiveness. On-the-job training was also employed where

practicable.

Further, in addition to the training provided by local staff, overseas

seminars, meetings and attachments were accessed; primarily at

our parent company. Professionals from Trinidad also conducted

training in various operational and credit areas. We continued

through our scholarship programs to afford staff the opportunity to

read for relevant degrees/diplomas at the tertiary level. under the

Stan Affonso Scholarship Plan, one new scholarship was granted.

Two officers are continuing under the Advanced Plan, with three

new scholarships having been granted. Two officers completed

the AICB Diploma programme offered by the Institute of Canadian

Bankers, 40 are continuing. The Bank’s youth link Apprenticeship

Programme continues to be well received, with the fourth batch of

26 apprentices having come on board on October 27, 2011 and

graduated in May 2012.

As we embrace the future, we intend optimising staff potential

through continued opportunities for staff development to ensure

the quality of human resource necessary to take us into the

future.

Technology

Our real-time front-line banking system, which facilitates any branch

banking, continues to impact positively on our service delivery.

Our Point of Sale (POS) network continues to expand with some

235 merchants on board at 262 locations nationwide, as more

businesses recognise the convenience, reliability and safety these

devices afford; especially at a time when criminal activity remains

a concern. Our ATM network comprises 33 machines, and we will

continue to explore other feasible locations as informed by usage/

demand. The Bank’s Core Banking System and ATM and POS

software were also updated.

Given the increase in technologically driven products, the

Bank remains committed to affording customers innovative and

convenient means of conducting banking. To this end, we will

continue our focus of educating customers about the benefits of

using our various products and services, which also include Online

and Telephone Banking. Our International Debit Card, the only in

the local financial sector, continues to benefit customers given its

reach worldwide.

Premises/Operations

While no major construction was pursued during fiscal 2012, the

Bank continued routine maintenance of its various locations, in

keeping with our corporate image. Of significance, however, and

in keeping with our ongoing thrust to effectively manage operating

cost, the Bank commissioned a state-of-the-art energy

management lighting system at five (5) of its 10 locations. utilising

specialised sensors in conjunction with dimmable lighting ballasts,

the system has the ability to detect fine motions and adjust lights

on or off according to users’ needs. It also makes use of ambient

lighting, by dimming lighting fixtures to a level that is sufficient

for normal business operations, thereby reducing electricity

consumption. The Bank’s electronic surveillance continues to be

upgraded as well.

Plans are moving apace for construction of a new branch, at

Rosignol, West Coast Berbice, which will afford both staff and

customers modern and spacious facilities to conduct business,

and a branch in lethem. Future plans include a presence on the

East Coast of Demerara. In our ongoing thrust to improve efficiency,

the operations of several departments were reviewed and changes

implemented, as deemed necessary to improve output. This

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STaTeMeNT OF INCOMe ReVIew

Financial Summary

After-tax profit of $2,013 million represents an increase in

profitability of $84.6 million or 4.4% over 2011. This increase in

profitability resulted from an increase in net interest and other

income. Additionally, Corporation Tax paid during the year

amounted to $1,132 million compared with $1,546 million in 2011.

Financial Summary

The Bank’s return on average assets (1.9%) remained stable

year-on-year, however, there was a decline in return on average

stockholders’ equity (19.6%). Earnings per stock unit increased

from $6.4 in 2011 to $6.7 in 2012.

2012 2011

united States dollars 202.5 202.5

Pounds Sterling 309.0 309.0

Canadian dollars 195.0 197.5

Euro 261.5 271.5

08 09 10 11 12

Profit Before/after Tax ($ Millions)

2,54

9

1,56

0 1,82

1

1,98

2

1,92

8

2,01

3

2,92

3

3,39

7

3,17

5

3,22

1

3750

3500

3250

3000

2750

2500

2250

2000

1750

1500

1250

1000

750

500

250

0

Profit Before Tax Profit after Tax

approach will continue in the new fiscal given the obvious benefits

in terms of external and internal customer satisfaction.

Community Relations

The Bank celebrated its 175th Anniversary during 2012, and as such

it is opportune to pause and reflect on our history. With 175 years of

operations, our Bank has been contributing to the development of

our country as the British Guiana Bank, the Royal Bank of Canada,

National Bank of Industry and Commerce limited and now as

Republic Bank (Guyana) limited. It is our intention with your help,

to serve Guyana for many more years to come. Our ongoing

commitment to the welfare of our people was demonstrated

through annual donations toward youth development, charities

such as orphanages, senior citizens homes, and institutions

for the physically challenged. We have also supported various

sporting disciplines throughout the regions, and undertaken

sponsorship at the competitive level for cricket, badminton, and

basketball. Educational institutions from nursery to university have

benefited from funding from Republic Bank, and our community

activities remain an integral part of our vision of banking, as we

remain committed to the development of Guyana, its communities

and people. We believe it is our duty as a responsible corporate

citizen to make a positive difference in the lives of our people and

enhance the communities in which we operate.

Foreign account Tax Compliance act (FaTCa)

As widely publicised, the united States Government enacted the

Foreign Account Tax Compliance Act (FATCA) in 2010 as part of

its efforts to combat tax evasion by uS persons. under FATCA, uS

persons holding financial assets outside of the united States are

required to report these to the uS Inland Revenue Service (IRS).

It means, therefore, that foreign financial institutions such as the

Republic Bank Group, must enter a special agreement with the

IRS during 2013 to give effect to such reporting. To this end, the

Republic Bank Group has mobilised efforts to ensure compliance

with FATCA.

We present below a discussion and analysis of the financial

position and performance of the Bank for the year ended

September 30, 2012, to be read in conjunction with the Directors’

report and audited financial statements, presented on pages 12 to

14 and pages 36 to 88 respectively.

These statements are published in Guyana dollars. Foreign

amounts have been converted to Guyana dollars at the prevailing

mid-rate on September 30, for each financial year. The following

are the mid-rates for the major currencies as at September 30,

2012:

20

Other Income which amounted to $1.9 billion and contributed

25.3% to total income, was above the 2011 amount of $1.8

billion by $136.7 million, or 7.6%. Continued emphasis on foreign

exchange trading resulted in exchange gains for 2012 of $1,080

million, however, this represented a decrease of $28.1 million

or 2.5% over 2011. Exchange earnings continue to be the main

source of Other Income, contributing 55.9% (2011 - 60.9%) of the

total.

Net interest and other income grew by $194.2 million or 2.9%

to $6.8 billion in 2012 compared to the $6.6 billion generated in

2011.


08 09 10 11 12

Interest Income/Interest expense ($ Millions)

4,94

6

1,33

5

1,01

4

922

890

852

5,42

7

5,55

0

5,66

4

5,68

3

6000

5000

4000

3000

2000

1000

0

Interest Income Interest expense

Net Interest and Other Income

Net interest income remained stable at $4.8 billion and is attributed

primarily to the tight management of interest expense.

The ratio of the Bank’s average interest earning assets to

average customer deposits, increased to 88.2% from 87.5% in

2011. This reflects the Bank’s policy of making maximum use

of customers’ deposits in a challenging environment where

investments and lending opportunities are relatively scarce. At

September 30, 2012, 47% of the Bank’s interest earning assets

consist of Government of Guyana Treasury Bills.

Interest paid on deposits for 2012 at $851 million, was lower

than that of 2011 ($890 million) as the Bank continued to manage

its assets and liabilities in an environment of inadequate investment

opportunities. We recognise however, that our customers

simultaneously use a range of our products and we strive to ensure

that our rates (deposit and lending) are competitive with the rest of

the industry and attractive to existing and potential customers.

3.00

2.50

2.00

1.50

1.00

0

08 09 10 11 12

Return on average Total assets (%)

1.9 2.0 2.1

1.9

1.9

30.00

25.00

20.00

15.00

10.00

5.00

0

08 09 10 11 12

Return on average Outstanding equity (%)

27.2

25.9

24.1

20.6

19.6

Sources of Revenue (%)

loans and advances

Investments

Foreign Business

Other

11%

57%

18%

14%

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Salaries/Staff Cost

Taxation

Reserve and Retained earnings

Premises andequipment

Other Non-Interest expenses

Interest expenses

Dividends

Non-interest expense

Non-interest expenditure, which comprises operating expenses

and provision for loan losses, increased by $148.3 million, or 4.4%

over 2011. Staff cost increased to $1,620 million. There was also

an increase in depreciation charges ($3.1 million) and a significant

decline in loan losses net of recoveries of $43.4 million.

In accordance with IAS 39, as well as under the Financial

Institutions Act, the Bank conducts an annual review of its impaired

loans. There are three levels at which the Bank provides for actual

and potential loan impairment. These are a General Banking Risk

Reserve and General and Specific Provisions for non-performing

loans. After a $243.2 million transfer from income in 2012, the

amount set aside for the General Banking Risk Reserve amounts

at year end to $1,283 million. This Reserve which is discussed in

some length on page 64 of this report is consistent with the Bank’s

policy of maintaining 100% provision for its non-performing loans

and is in addition to the General provision.

The financial statements include general provision made on its

performing portfolio under IAS 39, of $191.4 million at September

30, 2012, an increase of $8.2 million. This provision reflects the

level of inherent risk in the loan portfolio for which there is no

specific provision.

At September 30, 2012, specific provision on non-performing

loans amounted to $101.0 million, a decrease of $20.7 million over

2011. Overall in 2012, expenses related to loan-loss provisioning

amounted to $134.2 million against a provision of $175.2 million

in 2011. Notwithstanding the reductions, the Bank continues to

adopt a very prudent policy, especially on its unsecured consumer

lending portfolio. Recoveries on loans which were previously

written-off amounted to $170.9 million in 2012 (2011- $95.2 million).

The Bank’s ratio of non-performing to performing loans as at

September 30, 2012 remained stable at 3.7%. On the other hand its

ratio of specific provision for loan losses to non-performing loans

declined from 10.5% at September 30, 2011 to 7.3% at September

30, 2012 reflecting the quality of collateral held to secure the newly

classified non-performing loans.

STaTeMeNT OF FINaNCIal POSITION ReVIew

Cash and Cash equivalents

Cash and cash equivalents, which include cash-on-hand, deposits

held with correspondent banks, claims on other banks and balances

in excess of the statutory deposit increased by $6.2 billion year on

year. This increase is due mainly to increased customer deposits

and matured Government of Guyana Debentures. The statutory

deposit balance with Bank of Guyana increased by $718.7 million

over the same period.

available-for-sale Investment Securities

Available-for-sale investment securities, including Government of

Guyana Treasury Bills, declined by 3.2% during the year ($1.5 billion).

The decrease was mainly as a result of the maturity of Government

of Guyana Debentures moving from $1.8 billion to $0.8 billion at

September 30, 2012 or 54.7%. The Bank aggressively competes

for the limited investment opportunities even as the liquidity of

the country’s financial houses continues to grow relative to those

investments.

advances

Advances grew by $5.8 billion to $38.6 billion, an increase of 17.7%.

The concentration by sector in the loans and advances portfolio, a

function of the Bank’s Credit Risk Management process, remained

fairly constant during the year. Significantly, however, the Home

Mortgages sub-sector recorded a 24.4% increase in value from

$8.6 billion to $10.7 billion. We continue our efforts both to join the

Government in facilitating home construction and ownership.

As a percentage of total assets, loans and advances accounted

for 33.5%, up from the 31.7% achieved in 2011.

Total assets

The Bank’s total assets of $115.3 billion represented an increase

of $11.5 billion or 11.0% over 2011. Of this loans and advances

accounted for an increase of $5.8 billion and available-for-sale

investment securities and Treasury Bills for $1.5 billion. Over the

9%

9%

17%

11%

31%

13%

10%

Revenue Distribution (%)

22

past three years, net investment in loans and advances grew by

$5 billion, $4.5 billion and $5.8 billion, respectively. In a challenging

and competitive environment for sound economic projects,

the Bank continues to seek and attract new and remunerative

investments, even as we honour our obligation to protect our

depositors’ funds.

Deposits

Our asset growth was funded mainly from deposits. As depositors

continued to show confidence in the Bank, our overall portfolio

increased by $9.9 billion or 10.7%. This increase is in line with the

rest of the industry and well above the growth in the economy and

the rate of inflation. Savings deposits, the most stable category of

deposits at 71.6% of the deposit portfolio, grew by $9.0 billion or

14.2%. The Fixed Deposit (Term) portfolio grew modestly by $233

million or 3.3% compared with decline of $72 million or 1.0% in

2011.


CaPITal STRuCTuRe aND ReSOuRCeS

The Bank’s policy is to maintain capital adequacy, ensure capital

growth and minimise capital impairment. The governing Financial

Institutions Act 1995 restricts a single or group borrower loan to

defined percentages of the Bank’s capital base. From the after-

tax profits of $2,013 million, $875 million is being proposed as

dividends and $1,138 million transferred from the Statement of

Income to stockholders’ equity. At September 30, 2012, the book

value of stockholders’ equity amounted to $10.8 billion.

120

100

80

60

40

20

0

110

100

90

80

70

60

50

40

30

20

10

0

08 09 10 11 12

08 09 10 11 12

Total assets ($ Billions)

Total Deposits ($ Billions)

84,1

75

75,1

23

89,3

33

79,2

04

95,9

17

84,2

07

103,

876

91,8

72

115,

356

101,

736

08 09 10 11 12

Issued Capital and Stockholders’ equity ($ Millions)

6,31

6

300

300

300

300

10,8

04

7,46

7

8,66

5

9,64

0

300

11000

10000

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

Stockholders’ equity Issued Capital

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Total dividends paid and proposed for fiscal 2012 amount to

$875 million, an increase of 2.9% over the $850 million payout for

2011. This equates to a dividend payout ratio of 43.5% (2011 -

44.1%).

Stockholders enjoyed a significant increase in the price at which

the Bank’s stock traded on the Guyana Stock Exchange with a

spread of 61.5% between the highest price of $105.0 and lowest

price of $65.0 with an average weighted price of $87.8 per stock

unit. In terms of volume, most trades were done at a unit price

of $85.0. using the Market Weighted Average Price of $87.8 from

the last trade date (September 24, 2012) for the Bank’s stock, the

price/earnings ratio is 13.1 (2011 - 11.2). The net asset value of

one unit is $36.0 (2011 - $32.1) which, with a price of $87.8 gives a

price/book ratio of 2.44:1 (2011 - 1.89:1).

Regulatory Capital

Capital adequacy is monitored by the Bank on a monthly basis

and computed based on guidelines developed by the Basle

Committee on Banking Regulations and Supervisory Practice (the

Basle Committee), as implemented by the Bank of Guyana under

the Financial Institutions Act 1995.

The risk-based capital guidelines require a minimum ratio of

capital to risk-weighted assets of 8%. The results for this year have

further strengthened the Bank, with its capital base growing from

$9.6 billion to $10.8 billion year-on-year. The capital adequacy ratio

declined, moving to 19.7% at September 30, 2012, from 19.8% at

September 30, 2011. Together, these provide a solid platform for

future growth and expansion in loans, advances and revenue.

RISK MaNaGeMeNT

Overview

Banking is about risks and their management. These are discussed

extensively on pages 68 to 80 of this Annual Report.

The Bank manages these risks at all levels of its corporate

structure applying quantitative and qualitative criteria and strict

levels of authority throughout the organisation. The Bank also

benefits from continuous guidance and services of the Risk

Management unit and the Internal Audit Department of the Parent

Company.

The Internal Audit Department of the Bank and that of its

parent company are also integrally involved in reviewing and

implementing systems and procedures to combat operational risk.

The Department, through its random audits and internal verification

processes, is tasked with ensuring that the integrity of the Bank’s

operations is maintained at all times.

Future Outlook

In recognition of our role in the development of the country, we will

continue to focus on customer service, innovation and asset quality.

Our investment in the development of our service delivery locations

is evidence of our confidence in Guyana. Our operating income

remains strong, staff are competent, and Management and the

Board remain committed to the organisation’s continued growth

and development. These attributes, and the strategies which we

have in place, leave us well equipped to face the challenges of the

future.

In the financial sector, we expect the continuation of aggressive

competition in a low interest rate environment which may further

erode net interest margins. We are however, confident that we

have implemented the necessary strategies and will successfully

utilise our resources to continue performing satisfactorily. We are

making significant investments in technology and systems, and

while these will impact current cost, they will provide for significant

future benefits. During fiscal 2013 we will continue to upgrade our

premises, and plans for our lethem and new Rosignol Branches

will be advanced. A number of new lifestyle based products are

under consideration for roll-out during the course of the year. As we

move forward, staff training at all levels will continue to be a priority

as we entrench the core values of customer service, respect for the

individual, honesty, integrity, confidentiality and team orientation.

We remain committed to ensuring efficiency in all that we do in

order to provide the highest quality of service to our customers and

people of Guyana.

The future is replete with opportunities such as the renewed

prospects of oil exploration in the Berbice region and the Amaila

Falls hydro-electric project, which have to be balanced against the

challenges associated with the continued phased reduction of Eu

sugar prices, rising prices and crime levels. Republic Bank (Guyana)

limited remains committed to Guyana and its development and will

continue to demonstrate this in the development opportunities for

our staff, enhancement to physical and technological infrastructure

and our Power to Make a Difference social investment programme.

Political stability, however, remains an imperative and efforts

must be intensified to provide the requisite infrastructure for social

and economic growth. As alluded to earlier, the performance of

the Bank is influenced by the environment in which it operates.

Hence, the constraints which continue to impede our plans need

to be addressed with urgency by the relevant authorities. Similarly,

24


increased take-up and use of the Bank’s technological products

through its network depend heavily on modern and reliable

telecommunication infrastructure. Our progress over the years has

been steady and our plans for the future are many and varied.

Management and staff are committed to meeting the challenges

ahead, with the support of our customers and stockholders.

acknowledgements

I thank our staff for their commitment and dedication, customers

and stockholders for their support and loyalty, and Board of

Directors for their oversight.

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John N. alves

Managing Director

Denise e. Hobbs

General Manager, Corporate and Management Services

Patricia Plummer

General Manager, Credit

John N.

Alves

Denise E.

Hobbs

Patricia

Plummer

Senior Management

26

Denys R. Benjamin

Manager, Corporate Operations

Charles H. Bruton


Celine e. Davis

Manager, Branch Support Services

Harry Dass Ghaness

Manager, Corriverton Branch

Stanton Grant

Manager, Internal Audit

Sherwyn l. Greaves

Manager, Camp Street Branch

yonnette F. Greaves

Manager, Information Technology

Sasenarain Jagnanan

Senior Manager, Corporate and Commercial Credit

Michelle H. Johnson

Manager, Marketing and Communications

Devan Khemraj

Manager, Branch Operations

leon e. McDonald

Manager, Rose Hall Branch

Christine a. McGowan

Manager, legal Services

anita Mohabeer

Manager, Human Resources

Jadoonauth Persaud

Manager, Water Street Operations

Carla F. Roberts


Vanessa a. Thompson

Manager, Finance and Planning

Management

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Denys R.

Benjamin

Charles H.

Bruton

Stanton

Grant

Michelle H.

Johnson

Jadoonauth

Persaud

Celine E.

Davis

Harry Dass

Ghaness

Sherwyn L.

Greaves

Yonnette F.

Greaves

Christine

A. McGowan

Sasenarain

Jagnanan

Anita

Mohabeer

Devan

Khemraj

Leon E.

McDonald

Carla F.

Roberts

Vanessa A.

Thompson

28

The Power to Make a Difference

“We recognise that building communities goes well beyond

random donations. It is about social intervention, social

investment and a genuine long-term commitment to partner

with like-minded organisations to change mindsets and provide

opportunities for persons to learn, achieve and prosper. This is,

in fact, the driving focus of the Power to Make a Difference.”

John N. Alves, Managing Director, Republic Bank (Guyana) limited

A constant throughout the years in our nation’s financial sector for

175 years, Republic Bank (Guyana) limited remains committed

to serving the people of our country, helping to realise dreams

and providing hope for those in need. Having been a key part

of Guyana’s financial, social and cultural history for decades,

Republic Bank (Guyana) limited takes pride in being keenly

attuned to the ever-changing needs of the Guyanese people and

nation.

Acting on the firm belief that we could help make a positive

difference in the lives of the young, the elderly, the disenfranchised

and differently-abled in our communities, we launched, in 2004,

our groundbreaking Power to Make a Difference programme and

in so doing, changed the face of corporate social responsibility.

Eight years later, we have seen and experienced the beneficial

results of this choice, even as we continue the journey.

We believe in the value of every human life and in the ability

of every individual to contribute to the development of our nation.

This belief has guided the evolution of the Power to Make a

Difference over the years, under the four pillars – the Power to

Care, the Power to learn, the Power to Succeed and the Power

to Help.

Our hope is that, as we continue to fulfil the aims and beliefs

of this initiative, others will be motivated to take up and carry the

torch of social responsibility, to the overall benefit of the nation and

region.

Our history as one of the longest serving financial institutions

in Guyana has been one of leadership and achievement. The

partnerships we have forged throughout the years have catalysed

our social investment efforts, and the success of these efforts has

inspired us to keep moving forward with our vision.

These relationships with various non-governmental

organisations (NGOs) and community-based organisations

(CBOs) have helped transform the shape and face of communities,

while unlocking the potential of their members.

We believe that our nation’s future lies in investing in our young

people, and through the Power to Make a Difference, we have

placed a major focus on empowering our youth, through sporting,

educational and cultural programmes. We are pleased to be able

to say that thousands of young people have come to employ their

talents and realise their potential through our programmes, and

this includes our sponsorship of the Republic Bank youth link

apprenticeship Programme.

We also consider culture an important vehicle for youth

development. With the aim of giving young people an

understanding of the nation’s history and culture, we have

sponsored the annual Republic Bank Mashramani Steel Band

Competition and the annual Republic Bank Pan Minors Music

literacy Programme. Our educational focus extends to the

award of a university of Guyana Scholarship; maintenance of

the university library Business Journal Subscription as well as

the university of Guyana and Ministry of education academic

achievement awards.

In continuing our commitment to the needs of the differently-

abled, we have worked with NGOs in their struggle to improve the

quality of life of those with both visible and hidden disabilities. We

have worked with the Guyana Community Based Rehabilitation

Programme to maintain the 15-seater reconditioned minibus

that was donated to the organisation to aid the programme

beneficiaries’ transportation needs.

We have also extended our support for other initiatives, such

as the maintenance of the Promenade Gardens and the Staff

Volunteerism Programme whereby staff avail themselves to help

enrich the lives of residents of senior citizen homes, orphanages

and disability centres.

As a corporate citizen, Republic Bank believes that it is not

enough to be aware of the needs of those around us – we must

do what we can to fulfil those needs. However large or small the

impact of our efforts may be, we stand firm in the knowledge

that no effort is wasted. The differently-abled child who now has

a wheelchair; the dyslexic student who can now function in a

classroom of his peers; the young footballer who has received a

football scholarship; the senior citizen who now has a comfortable

place to sleep – their smiles, their well-being, their successes and

their survival – these are the only reasons we need for continuing

to embrace the Power to Make a Difference.

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Republic Bank/

University of Guyana

Awards – Best

Graduating Social

Science Degree

Student 2011

Republic Bank

RightStart Pan Minors

Music Literacy

Programme – Closing

Ceremony 2012

Republic Bank

Youth Link

Apprenticeship

Care-A-Van outreach

to the Ptolemy Reid

Rehabilitation Centre

Republic Bank

Mashramani Steel

Band Competition

2012

30

COMMUNITY

The One for You for 175 Years

2007

Launch of the

Power to Make a

Difference

Programme

PROGRESS

1836

British Guiana Bank,

Water and Robb

Streets

1986

Bank celebrated

150 years of service,

with celebrations

culminating in

a float around

Georgetown

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2006

Corporate

Rebranding of NBIC

Limited to

Republic Bank

(Guyana) Limited

2009

Business Excellence

Award for

HIV/AIDS

Workplace

Programmes

EXCELLENCE

1997

Republic Bank

meets with

Janet Jagan,

Prime Minister

of Guyana

VISION

2009

Staff Rally,

celebrated #1

position in Customer

Service and to launch

Customer Care

SERVICE

32

Corporate Governance has been defined as “the system by which

companies are directed and controlled”. Alternatively, it can be

said that corporate governance refers to the system by which

companies are led and managed, the structure and role of the

Board of Directors, relations with stakeholders and the framework

of internal control. The Board of Directors of Republic Bank

(Guyana) limited is committed to proper standards of Corporate

Governance and maintaining these standards at the highest

level. We continuously monitor our systems and procedures to

ensure that our standards are in keeping with the best practice as

determined by the Principles of Corporate Governance. The Bank

is also guided by the Recommendations for a Code of Corporate

Governance issued by the Guyana Securities Council and

Supervision Guideline No. 8 issued by the Bank of Guyana under

the authority of the Financial Institutions Act 1995. The Bank has

adopted the recommendations contained in that Guideline. This

statement is made pursuant to the abovementioned Supervision

Guideline Number 8.

The Board of Directors comprises nine directors including one

executive director. The non executive directors comprise persons

with extensive experience in both business and finance, five of

whom are independent directors and provide invaluable input

at meetings through their personal values and standards arising

from their varied and distinct backgrounds. Together the Board

members provide entrepreneurial leadership within a framework

of prudent and effective controls. In keeping with the Bank’s

culture of broad disclosure the executive director ensures that all

pertinent information relevant to the Bank’s operations is provided

to members of the Board of Directors.

The Board is charged with the mandate to lead the Bank along

a path of greater profitability without compromising the Bank’s

sound financial position while ensuring compliance with applicable

laws. Of critical importance to the Board of Directors is the

responsibility to approve and review the Bank’s Strategic Plan and

within this context to approve Annual Budgets, including capital

expenditure. The Board retains the responsibility for reviewing and

approving credit applications above a specified limit. Pursuant to

the mandate to ensure that the interests of the various stakeholders

are considered the Board of Directors meets on a quarterly basis

while the Executive Sub-Committee of the Board, comprising

seven Board members, meets monthly for the remaining eight

months. The Managing Director’s responsibilities and authorities

are documented and approved by the Board of Directors. limits

on credit dispensation, capital and operating expenditures are

stated specifically in the Managing Director’s authorities.

In accordance with the Bank’s By-laws, three directors retire

from the Board annually and may offer themselves for re-election

at the Bank’s Annual General Meeting.

The following Board committees exist to ensure the Bank’s

commitment to maintaining the highest standards of Corporate

Governance:

auDIT COMMITTee

The members of the Audit Committee are:

Roy E. Cheong, Chairman

David Dulal-Whiteway, Member

Richard I. Vasconellos, Member

John G. Carpenter, Alternate Member

The Audit Committee of the Board meets at least quarterly to review

the Bank’s system of internal control, financial reporting process,

audit and inspection process, and compliance with statutory

and regulatory laws. When necessary, the Audit Committee is

responsible for reviewing the independence, competence and

qualifications of the External Auditors. The External Auditors receive

notice of every meeting of the Audit Committee and may attend as

of right. The head of the Bank’s Internal Audit Department, reports

directly to the Audit Committee. The Internal Audit Department

conducts periodic examinations of all aspects of the Bank’s

operations to ensure that management’s controls for the integrity

and fairness of the financial statement and accounting systems are

adequate and being complied with.

COMPeNSaTION COMMITTee

The members of the Compensation Committee are:

Nigel M. Baptiste, Chairman

William H. Pierpont Scott, Member

Derwin M. Howell, Member

Roy E. Cheong, Alternate Member

This Committee, which meets at minimum once per year, is

responsible for formalising the Bank’s remuneration policy for all

staff.

OTHeR RISKS COMMITTee

The members of the Other Risks Committee are:

John G. Carpenter, Chairman

Roy E. Cheong, Member

Derwin M. Howell, Member

William H. Pierpont Scott, Alternate Member

Statement of Corporate Governance Practices

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This committee, which meets quarterly, is responsible for

reviewing policies and procedures and ensuring that the Bank is

not exposed to unnecessary risk with respect to its operations.

In keeping with good corporate governance principles the

Executive Director is charged with the day-to-day management

of the Bank’s business and is ably assisted by a competent and

experienced management team. Two members of the Senior

Management Team are Fellows of the Institute of Canadian Bankers

while the other is qualified in Business Management making the

team extremely qualified to offer leadership to the management

team. The Board of Directors has approved an organisational

structure for the Bank which ensures a reporting structure with

prudent and effective controls. The Managing Director and

management team are appointed by the Board of Directors.

The Board of Directors ensures that the compensation package

for staff is competitive. The package consists of basic salary and

performance-based incentives. The performance of each staff

member is evaluated annually, based on individual and collective

performance criteria.

Cognisant of the need to monitor transactions with related

parties, the Bank has approved a related party policy which is

consistent with the requirements of the Financial Institutions Act

1995.

The Bank regards its business and the banking affairs of its

customers and clients as confidential, and has established rules

to ensure the highest ethical standards in this regard. These

rules pertain to honesty and integrity, integrity of records, client

privacy, proprietary bank information, insider information and non-

discrimination, among others.

The Bank encourages its stockholders to communicate all

issues of concern orally or in writing. All stockholder concerns are

addressed in a prompt and efficient manner by Management.

The External Auditors have full and free access to, and meet,

when necessary, with the Audit Committee to discuss their

audit and findings as to the integrity of the Bank’s financial and

accounting reporting and the adequacy of the system of internal

controls.

Signed on behalf of the Board

David Dulal-whiteway

Chairman

34

The financial statements which follow were prepared by the

management of Republic Bank (Guyana) limited.

While the form of the financial statements and the accounting

policies followed are similar to those used by many banks and

are prepared in conformity with the requirements of International

Financial Reporting Standards, the Companies Act 1991, the

Financial Institutions Act 1995, and the Securities Industry Act

1998, some amounts must of necessity be based on the best

estimates and judgement of management.

In discharging its responsibility for the integrity and fairness

of the financial statements and for the accounting systems from

which they are derived, management maintains the necessary

system of internal controls designed to provide assurance that

transactions are authorised, assets are safeguarded, and proper

records are maintained. These controls include quality standards in

hiring and training of employees, written policies and procedures,

and accountability for performance within appropriate and well

defined areas of responsibility. The system of internal controls

is further supported by the Bank’s Internal Audit Department

and that of the parent company, both of which conduct periodic

audits of all aspects of the Bank’s operations. From time to time,

the Bank Supervision Department of the Bank of Guyana carries

out examinations of the Bank’s operations under the Financial

Institutions Act 1995.

Messrs Ram & McRae, the Independent Auditors appointed to

report to the stockholders of the Bank, have audited our financial

statements in accordance with International Standards on Auditing.

We have disclosed to the Auditors all matters known to us

which may have a material effect on the accounts presented.

The Auditors have full and free access to the Audit Committee

of the Board of Directors to discuss their audit and their findings

regarding the integrity of the Bank’s financial reporting and the

adequacy of the system of internal controls. The Audit Committee

comprises directors who are not employees of the Bank.

John N. alves Christine a. McGowan

Managing Director Corporate Secretary

Financial Reporting Requirements

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INDEPENDENT AuDITORS’ REPORT 36

STATEMENT OF FINANCIAl POSITION 37

STATEMENT OF INCOME 38

STATEMENT OF COMPREHENSIVE INCOME 39

STATEMENT OF CHANGES IN EquITy 40

STATEMENT OF CASH FlOWS 41

NOTES TO THE FINANCIAl STATEMENTS 42

1 CORPORATE INFORMATION 42

2 SIGNIFICANT ACCOuNTING POlICIES 42

a BASIS OF PREPARATION 42

b CHANGES IN ACCOuNTING POlICIES 42

c CASH AND CASH EquIVAlENTS 47

d STATuTORy DEPOSIT WITH BANk OF GuyANA 47

e FINANCIAl INSTRuMENTS 47

f IMPAIRMENT OF FINANCIAl ASSETS 48

g lEASES 49

h PREMISES AND EquIPMENT 49

i GOODWIll 50

j EMPlOyEE BENEFITS 50

k TAxATION 50

l STATuTORy RESERVES 51

m EARNINGS PER STOCk uNIT 51

n FOREIGN CuRRENCy TRANSlATION 51

o INTEREST INCOME AND ExPENSE 51

p DIVIDENDS 51

q FEE AND COMMISSION INCOME 51

r SEGMENT REPORTING 51

s CuSTOMERS’ lIABIlITy uNDER ACCEPTANCES,

GuARANTEES, INDEMNITIES AND

lETTERS OF CREDIT 52

t ASSETS ClASSIFIED AS HElD-FOR-SAlE 52

u COMPARATIVES 52

3 SIGNIFICANT ACCOuNTING JuDGEMENTS

AND ESTIMATES 52

4 ADVANCES 53

5 INVESTMENT SECuRITIES 56

6 PREMISES AND EquIPMENT 57

7 GOODWIll 58

8 EMPlOyEE BENEFITS 59

9 DEFERRED TAx ASSETS AND lIABIlITIES 61

10 OTHER ASSETS 62

11 CuSTOMERS’ CuRRENT, SAVINGS AND DEPOSIT

ACCOuNTS 62

12 OTHER lIABIlITIES 63

13 STATED CAPITAl 63

14 OTHER RESERVES 64

15 OPERATING PROFIT 64

16 TAxATION ExPENSE 66

17 RElATED PARTIES 66

18 RISk MANAGEMENT 68

19 CAPITAl MANAGEMENT 80

20 FAIR VAluE 80

21 SEGMENTAl INFORMATION 83

22 MATuRITy ANAlySIS OF ASSETS AND lIABIlITIES 85

23 DIVIDENDS PAID AND PROPOSED 87

24 CONTINGENT lIABIlITIES 87

25 ExTERNAl PAyMENT DEPOSIT SCHEME 88

Contents

36

TO THe STOCKHOlDeRS OF RePuBlIC BaNK (GuyaNa) lIMITeD

We have audited the financial statements of Republic Bank (Guyana) limited which comprise the statement of financial position

as at September 30, 2012, and the related statements of income, comprehensive income, changes in equity and cash flows for

the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International

Financial Reporting Standards, the Companies Act 1991, the Financial Institutions Act 1995, and the Securities Industry Act 1998

and for such internal control as management determines is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance

with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform

the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of

the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as at September 30,

2012, and of its financial performance and cash flows for the year then ended in accordance with International Financial Reporting

Standards, the Companies Act 1991, the Financial Institutions Act 1995, and the Securities Industry Act 1998.

Ram & McRae

Chartered Accountants

157 ‘C’ Waterloo Street,

North Cummingsburg,

Georgetown, Guyana

October 22, 2012

Independent Auditors’ Report

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Statement of Financial Position

as at September 30, 2012

Expressed in thousands of Guyana dollars ($’000)

Notes 2012 2011

aSSeTS

Cash 1,321,714 975,963

Statutory deposit with Bank of Guyana 11,856,323 11,137,660

Due from banks 10,102,855 4,278,720

Treasury bills 40,208,527 40,525,362

Investment interest receivable 70,972 54,631

Advances 4 38,631,805 32,814,345

Investment securities 5 5,957,434 7,187,075

Premises and equipment 6 5,430,787 4,975,920

Goodwill 7 1,228,222 1,228,222

Deferred tax assets 9 175,868 156,945

Other assets 10 371,027 540,860

TOTal aSSeTS 115,355,534 103,875,703

lIaBIlITIeS aND eQuITy

lIaBIlITIeS

Due to banks 253,897 137,247

Customers’ current, savings and deposit accounts 11 101,736,334 91,871,620

Net pension liability 8 276,100 256,300

Taxation payable 314,276 218,888

Deferred tax liabilities 9 208,033 194,736

Accrued interest payable 33,407 33,274

Other liabilities 12 1,729,700 1,523,817

TOTal lIaBIlITIeS 104,551,747 94,235,882

eQuITy

Stated capital 13 300,000 300,000

Statutory reserves 14 300,000 300,000

Net unrealised gains 14 75,709 74,679

General banking risk reserve 14 1,282,602 1,039,437

Retained earnings 8,845,476 7,925,705

TOTal eQuITy 10,803,787 9,639,821

TOTal lIaBIlITIeS aND eQuITy 115,355,534 103,875,703

The accompanying notes form an integral part of these financial statements.

These financial statements were approved by the Board of Directors on October 22, 2012 and signed on its behalf by:

John N. alves Christine a. McGowan Roy e. Cheong

Managing Director Company Secretary Director, Chairman of Audit Committee

38

Statement of Income

For the year ended September 30, 2012


Notes 2012 2011

Interest income 15 (a) 5,683,450 5,664,308

Interest expense 15 (b) (851,588) (889,875)

Net interest income 4,831,862 4,774,433

Other income 15 (c) 1,929,748 1,792,995

6,761,610 6,567,428

loan impairment expense 4 (b) (134,252) (175,214)

Operating expenses 15 (d) (3,406,044) (3,216,784)

Profit before taxation 3,221,314 3,175,430

Taxation - Current (1,214,415) (1,196,313)

- Deferred 6,037 (50,753)

Total taxation expense 16 (1,208,378) (1,247,066)

Net profit after taxation 2,012,936 1,928,364

earnings per stock unit ($) 6.71 6.43


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Statement of Comprehensive Income



2012 2011

Net profit after taxation 2,012,936 1,928,364

Net gains/(losses) on available-for-sale investments 1,717 (171,820)

Tax relating to components of other comprehensive income (687) 68,728

Other comprehensive income for the year, net of tax 1,030 (103,092)

Total comprehensive income for the year, net of tax 2,013,966 1,825,272


40

Statement of Changes in Equity



General Net banking Stated Statutory unrealised risk Retained Total capital reserves gains reserve earnings equity

Balance at September 30, 2010 300,000 300,000 177,771 350,536 7,536,252 8,664,559

Profit for the year – – – – 1,928,364 1,928,364

Other comprehensive income – – (103,092) – – (103,092)

Total comprehensive income for the year – – (103,092) – 1,928,364 1,825,272

Transfer to general banking risk reserve – – – 688,901 (688,901) –

Dividends – – – – (850,010) (850,010)

Balance at September 30, 2011 300,000 300,000 74,679 1,039,437 7,925,705 9,639,821


Profit for the year – – – – 2,012,936 2,012,936

Other comprehensive income – – 1,030 – – 1,030

Total comprehensive income for the year – – 1,030 – 2,012,936 2,013,966

Transfer to general banking risk reserve – – – 243,165 (243,165) –

Dividends – – – – (850,000) (850,000)


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Statement of Cash Flows



2012 2011

Operating activities

Profit before taxation 3,221,314 3,175,430

adjustments for:

Depreciation 322,835 319,756

loan impairment expense 134,252 175,214

Gains on sale of premises and equipment (2,353) (212)

Increase in employee benefits 19,800 19,700

Increase in advances (5,951,712) (4,683,930)

Increase in customers’ deposits and other fund raising instruments 9,864,714 7,664,575

Increase in statutory deposit with Bank of Guyana (718,663) (999,150)

Decrease in other assets and investment interest receivable 153,492 313,778

Increase/(decrease) in other liabilities and accrued interest payable 213,944 (272,300)

Net cash from operating activities before tax 7,257,623 5,712,861

Taxes paid (1,102,950) (1,561,860)

Cash provided by operating activities 6,154,673 4,151,001

Investing activities

Purchase of investment securities (120,000) (500,000)

Redemption of investment securities 1,241,633 3,159,753

Purchase of Treasury bills (40,625,350) (42,428,378)

Redemption of Treasury bills 41,012,150 36,076,710

Additions to premises and equipment (818,087) (783,334)

Proceeds from sale of premises and equipment 58,217 2,936

Cash provided by/(used in) investing activities 748,563 (4,472,313)

Financing activities

Increase/(decrease) in balances due to other banks 116,650 (13,376)

Dividends paid (850,000) (850,010)

Cash used in financing activities (733,350) (863,386)

Net increase/(decrease) in cash and cash equivalents 6,169,886 (1,184,698)

Cash and cash equivalents at beginning of year 5,254,683 6,439,381

Cash and cash equivalents at end of year 11,424,569 5,254,683

Cash and cash equivalents at end of year are represented by:

Cash on hand 1,321,714 975,963

Due from banks 10,102,855 4,278,720

11,424,569 5,254,683

Supplemental information:

Interest received during the year 5,573,190 5,675,943

Interest paid during the year 851,455 898,653

Dividends received 5,800 5,600


42

Notes to the Financial Statements


Expressed in thousands of Guyana dollars ($’000), except where otherwise stated

1 CORPORaTe INFORMaTION

The Bank was incorporated in the Co-operative Republic of Guyana on November 20, 1984 as a limited liability company under the

Companies Act, Chapter 89:01 and continued under the Companies Act 1991 on May 16, 1997 and is licensed as Bankers under the

Financial Institutions Act 1995.

The Bank was registered as a reporting issuer under the Securities Industry Act 1998 on April 7, 2003. It was designated as an

approved mortgage finance company by the Minister of Finance on September 2, 2003 under section 15 of the Income Tax Act.

Banking operations began on February 16, 1837 by the British Guiana Bank which had been incorporated on November 11, 1836.

On November 17, 1913 operations were sold to The Royal Bank of Canada. Assets and liabilities of the Guyana operations of The

Royal Bank of Canada were acquired by the Government of Guyana on November 29, 1984 and vested in the National Bank of

Industry and Commerce limited on December 1, 1984. In October 1997 the Bank became a subsidiary of Republic Bank limited of

Trinidad and Tobago and subsequently changed its name to Republic Bank (Guyana) limited on June 5, 2006. As at September 30,

2012 the stockholdings of Republic Bank limited in the Bank were 51.1%.

The Cl Financial Group holds through its various subsidiaries 51.4% of the stockholdings of Republic Bank limited.

On January 31, 2009, Central Bank of Trinidad and Tobago (CBTT) issued a Notification pursuant to sections 44D and 44E of the

Central Bank Act, Chap. 79:02 that the CBTT had assumed control of the affairs of ClICO Investment Bank limited (CIB). Further,

on February 13, 2009, the CBTT issued a Notification pursuant to sections 44D and 44E of the Central Bank Act, Chap. 79:02 that it

assumed control of the affairs of Colonial life Insurance Company (Trinidad) limited (ClICO). These two companies are part of the

Cl Financial Group.

In accordance with the provisions of both Notifications, the CBTT has the power to deal with the assets of the Companies,

including the Republic Bank limited shares. The CBTT will not receive any benefit financial or otherwise from the exercise of its

powers under the Central Bank Act. As at September 30, 2012, the combined stockholding of Republic Bank limited for ClICO and

CIB is 51.2%.

For the purpose of these financial statements, the related party note has not been amended to reflect the Central Bank control and

was prepared in a manner consistent with previous publications.

2 SIGNIFICaNT aCCOuNTING POlICIeS

The principal accounting policies applied in the preparation of these financial statements are set out below.

a) Basis of preparation

The financial statements of the Bank are prepared in accordance with International Financial Reporting Standards (IFRS), and are

stated in Guyana Dollars. These financial statements have been prepared on a historical cost basis, except for the measurement

at fair value of investment securities classified as available-for-sale and at fair value through profit or loss and derivative financial

instruments. The preparation of financial statements in conformity with International Financial Reporting Standards requires

management to make estimates and assumptions. Actual results could differ from those estimates. Significant accounting

judgements and estimates in applying the Bank’s accounting policies have been described in Note 3.

b) Changes in accounting policies

i) New accounting policies adopted

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the

preparation of the Bank’s annual financial statements for the year ended September 30, 2011 except for the adoption of

new and amended standards and interpretations noted below:

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2 SIGNIFICaNT aCCOuNTING POlICIeS (continued)

b) Changes in accounting policies (continued)

i) New accounting policies adopted (continued)

IAS 24 - Related Party Disclosures (Revised) (effective January 1, 2011)

The amended standard clarified the definition of a related party to simplify the identification of such relationships and to

eliminate inconsistencies in its application. The revised standard introduces a partial exemption of disclosure requirements

for government-related entities. The Bank does not expect any impact on its financial position or performance. Early

adoption is permitted for either the partial exemption for government-related entities or for the entire standard. The adoption

of this standard had no effect on the financial position or performance of the Bank.

IFRS 7 - Financial Instruments: Disclosures - Enhanced Derecognition Disclosure Requirements (effective July 1, 2011)

The amendment requires additional disclosures about financial assets that have been transferred, but not derecognised,

to enable the user of the Bank’s financial statements to understand the relationship with those assets that have not been

derecognised and their associated liabilities. In addition, the amendment requires disclosures about continuing involvement

in derecognised assets to enable the user to evaluate the nature of and risks associated with, the entity’s continuing

involvement in those derecognised assets.

IFRIC 14 - Prepayments of a minimum funding requirement (Amendments) (effective January 1, 2011)

The amendment provides guidance on assessing the recoverable amount of a net pension asset. The amendment permits

an entity to treat the prepayment of a minimum funding requirement as an asset.

IAS 1 - Presentation of Financial Statements (effective January 1, 2011)

The amendment clarifies that an entity will present an analysis of Other comprehensive income (OCI) for each component

of equity, either in the statement of changes in equity or in the notes to the financial statements. The amendment is applied

retrospectively, in accordance with the requirements of IAS 8 for changes in accounting policy.

IAS 34 - Interim Financial Reporting (effective January 1, 2011)

The amendment provides guidance to illustrate how to apply the disclosure principles in IAS 34 and requires additional

disclosures of the circumstances likely to affect fair values of financial instruments and their classification; transfers of

financial instruments between different levels of the fair value hierarchy; changes in classification of financial assets; and

changes in contingent liabilities and assets.The amendment is applied retrospectively, in accordance with the requirements

of IAS 8 for changes in accounting policy.

IFRS 7 - Financial Instruments: Disclosures (effective January 1, 2011)

The amendments emphasise the interaction between quantitative and qualitative disclosures and the nature and extent of

risks associated with financial instruments as follows:

The amendments clarify that only financial assets with carrying amounts that do not reflect the maximum exposure to

credit risk need to provide further disclosure of the amount that represents the maximum exposure to such risk;

The amendments require, for all financial assets, disclosure of the financial effect of collateral held as security and other

credit enhancements, including the amount that best represents the maximum exposure to credit risk (e.g., a description of

the extent to which collateral mitigates credit risk);

44






i) New accounting policies adopted (continued)

IFRS 7 - Financial Instruments: Disclosures (effective January 1, 2011) (continued)

The amendments remove the disclosure requirement of the collateral held as security, other credit enhancements and

an estimate of their fair value for financial assets that are past due but not impaired, and financial assets that are individually

determined to be impaired;

The amendments remove the requirement to specifically disclose financial assets renegotiated to avoid becoming past

due or impaired; and

The amendments clarify that the additional disclosure required for financial assets obtained by taking possession of

collateral or other credit enhancements are only applicable to assets held at the reporting date.

The amendment clarifies that when the fair value of award credits is measured based on the value of the awards for

which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating

in the award credit scheme is to be taken into account. The amendment is applied retrospectively, in accordance with the

requirements of IAS 8 for changes in accounting policy.

The adoption of these pronouncements had no impact on the Bank’s reported financial position or performance.

ii) New accounting policies not adopted

The Bank has not adopted the following new and revised IFRSs that have been issued as these standards do not apply to

the activities of the Bank:

IFRS 1 - First-time Adoption of International Financial Reporting Standards (Amendment) - Severe Hyperinflation and

Removal of Fixed Dates for First-time Adopters (effective July 1, 2011)

The amendment provides guidance on how an entity should resume presenting IFRS financial statements when its

functional currency ceases to be subject to severe hyperinflation.

iii) Standards and interpretations issued but not yet effective

IFRS 1 – Government loans – Amendment to IFRS 1 (effective January 1, 2013)

The amendment has added an exception to the retrospective application of IFRS 9 Financial Instruments (or IAS 39

Financial Instruments: Recognition and Measurement, as applicable) and IAS 20 Accounting for Government Grants and

Disclosure of Government Assistance. These amendments require first-time adopters to apply the requirements of IAS

20 prospectively to government loans existing at the date of transition to IFRS. However, entities may choose to apply the

requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to government loans retrospectively if the information needed

to do so had been obtained at the time of initially accounting for that loan.

IFRS 7 - Disclosures - Offsetting Financial Assets and Financial liabilities (effective January 1, 2013)

These amendments require an entity to disclose information about rights of set-off and related arrangements (e.g.,

collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting

arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that

are set off in accordance with IAS 32 Financial Instruments:Presentation. The disclosures also apply to recognised financial

instruments that are subject to an enforceable master netting arrangement or ‘similar agreement’, irrespective of whether

they are set off in accordance with IAS 32.

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iii) Standards and interpretations issued but not yet effective (continued)

IAS 32 - Offsetting Financial Assets and Financial liabilities (effective January 1, 2014)

These amendments clarify the meaning of the phrase “currently has a legally enforceable right to set-off” by stating that

rights of set-off must not only be legally enforceable in the normal course of business, but must also be enforceable in the

event of default and the event of bankruptcy or insolvency of all of the counterparties to the contract, including the reporting

entity itself. The amendments also clarify that rights of set-off must not be contingent on a future event. The amendments

also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems)

which apply gross settlement mechanisms that are not simultaneous.

IFRIC 20 - Stripping Costs in the Production Phase of a surface Mine (effective January 1, 2013)

This Interpretation applies to waste removal (stripping) costs incurred in surface mining activity during the production phase

of the mine. If the benefit from the stripping activity will be realised in the current period, an entity is required to account

for the stripping activity costs as part of the cost of inventory. When the benefit is the improved access to ore, the entity

should recognise these costs as a non-current asset, only if certain criteria are met. This is referred to as the “stripping

activity asset”. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset.

If the costs of the stripping activity asset and the inventory produced are not separately identifiable, the entity allocates the

cost between the two assets using an allocation method based on a relevant production measure. After initial recognition,

the stripping activity asset is carried at its cost or revalued amount less depreciation or amortisation and less impairment

losses, in the same way as the existing asset of which it is a part.

IAS 12 - Income Taxes (Amendment)/Deferred taxes - Recovery of underlying Assets (effective January 1, 2012)

The amendment clarified the determination of deferred tax in investment property measured at fair value by introducing a

rebuttable presumption that deferred tax on investment property measured using the fair value model in IAS 40 should be

determined on the basis that its carrying amount will be recovered through sale. Furthermore, the amendment introduces

the requirement to calculate deferred tax on non-depreciable assets that are measured using the revaluation model in IAS

16 to always be measured on the sale basis of the asset.

IFRS 9 - Financial Instruments: Classification and Measurement ((Phase 1) effective January 1, 2015)

IFRS 9 as issued reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to classification

and measurement of financial assets and liabilities as defined in IAS 39. In subsequent phases, the Board will address

impairment and hedge accounting. The adoption of the first phase of IFRS 9 will primarily have an effect on the classification

and measurement of the Bank’s financial assets.

IFRS 10 - Consolidated Financial Statements, IAS 27 Separate Financial Statements (effective January 1, 2013)

IFRS 10 replaces the portion of IAS 27 that addresses the accounting for consolidated financial statements. It also addresses

the issues raised in SIC-12 Consolidation - Special Purpose Entities resulting in SIC-12 being withdrawn. IAS 27, as revised,

is limited to the accounting for investments in subsidiaries, joint ventures, and associates in separate financial statements.

IFRS 10 does not change consolidation procedures (i.e., how to consolidate an entity). Rather, IFRS 10 changes whether

an entity is consolidated by revising the definition of control.

46







IFRS 11 - Joint Arrangements, IAS 28 Investments in Associates and Joint Ventures (effective January 1, 2013)

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities - Non-monetary Contributions by

Venturers. Joint control under IFRS 11 is defined as the contractually agreed sharing of control of an arrangement, which

exists only when the decisions about the relevant activities require the unanimous consent of the parties sharing control.

The reference to ‘control’ in ‘joint control’ refers to the definition of ‘control’ in IFRS 10.

IFRS 12 - Disclosure of Interests in Other Entities (effective January 1, 2013)

IFRS 12 applies to an entity that has an interest in subsidiaries, joint arrangements, associates and/or structured entities.

Many of the disclosure requirements of IFRS 12 were previously included in IAS 27, IAS 31, and IAS 28, while others are

new. The objective of the new disclosure requirements is to help the users of financial statements understand the effects

of an entity’s interests in other entities on its financial position, financial performance and cash flows and to understand the

nature of, and the risks associated with the entity’s interest in other entities.

IFRS 13 - Fair Value Measurement (effective January 1, 2013)

IFRS 13 does not affect when fair value is used, but rather describes how to measure fair value where fair value is required

or permitted by IFRS. Fair value under IFRS 13 is defined as ‘the price that would be received to sell an asset or paid to

transfer a liability in an orderly transaction between market participants at the measurement date’ (i.e., an ‘exit price’). ‘Fair

value’ as used in IFRS 2 Sharebased Payments and IAS 17 leases is excluded from the scope of IFRS 13.

IAS 1 - Presentation of Items of Other Comprehensive Income - Amendments to IAS 1 (effective July 1, 2012)

The amendments to IAS 1 change the grouping of items presented in Other Comprehensive Income (OCI). Items that would

be reclassified (or recycled) to profit or loss at a future point in time (for example, upon derecognition or settlement) would

be presented separately from items that will never be reclassified. The amendments do not change the nature of the items

that are currently recognised in OCI, nor do they impact the determination of whether items in OCI are reclassified through

profit or loss in future periods.

IAS 19 - Employee Benefits (revised) (effective January 1, 2013)

The revised standard includes a number of amendments that range from fundamental changes to simple clarifications and

re-wording. The more significant changes include the following:

For defined benefit plans, the ability to defer recognition of actuarial gains and losses (i.e., the corridor approach) has

been removed. As revised, actuarial gains and losses are recognised in OCI when they occur. Amounts recorded in profit

or loss are limited to current and past service costs, gains or losses on settlements, and net interest income (expense). All

other changes in the net defined benefit asset (liability) are recognised in OCI with no subsequent recycling to profit or loss.

under the amended version of IAS 19, the excess of the Bank’s defined benefit liability of $150.3 million as shown in note

8(a) will be reversed in the Statement of Financial Position.

Objectives for disclosures of defined benefit plans are explicitly stated in the revised standard, along with new or revised

disclosure requirements. These new disclosures include quantitative information of the sensitivity of the defined benefit

obligation to a reasonably possible change in each significant actuarial assumption.

Termination benefits will be recognised at the earlier of when the offer of termination cannot be withdrawn, or when the

related restructuring costs are recognised under IAS 37.

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IAS 19 – Employee Benefits (Revised) (effective January 1, 2013) (continued)

The distinction between short-term and other long-term employee benefits will be based on expected timing of

settlement rather than the employee’s entitlement to the benefits.

c) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents consist of highly liquid investments, cash at

hand and at bank, treasury bills, bills discounted and bankers’ acceptances with original maturities of three months or less.

d) Statutory deposit with Bank of Guyana

Pursuant to the Financial Institutions Act 1995, the Bank is required to maintain with the Bank of Guyana a statutory reserve

balance in relation to the deposit liabilities of the institution.

e) Financial instruments

The Bank’s financial assets and financial liabilities are recognised in the statement of financial position when it becomes party

to the contractual obligation of the instrument. A financial asset is derecognised when the rights to receive the cash flows from

the asset have expired or where the Bank has transferred all the risks and rewards of ownership of the asset. A financial liability

is derecognised when the obligation under the liability is discharged, cancelled or expires. All ‘regular way’ purchases and sales

are recognised at settlement date.

i) Advances

Advances are financial assets with fixed or determinable payments and fixed maturities that are not quoted in an active

market. They are not entered into with the intention of immediate or short-term resale and are not classified as ‘Financial

assets held for trading’, designated as ‘Financial investment - available-for-sale’ or ‘Financial assets designated at fair value

through profit or loss’. After initial measurement, advances are subsequently measured at amortised cost using the effective

interest rate method, less allowance for impairment. Amortised cost is calculated by taking into account any discount

or premium on acquisition and fees and costs that are an integral part of the effective interest rate. The amortisation

is included in ‘Interest income’ in the Statement of Income. The losses arising from impairment are recognised in the

Statement of Income in ‘loan impairment expense’.

ii) Investment securities

- At fair value through profit or loss

Financial assets are classified in this category if they are either acquired for the purpose of selling in the short term or if so

designated by management. Securities held as financial assets at fair value through profit or loss are initially recognised

at fair value plus transaction costs and are continuously measured at fair value based on quoted market prices where

available, or discounted cash flow models. All gains and losses realised and unrealised from trading securities and those

designated at fair value through profit or loss are reported in other income whilst losses are reported in operating expenses.

Interest and dividends earned whilst holding trading securities and those designated at fair value through profit or loss

are reported in interest income.

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e) Financial instruments (continued)

ii) Investment securities (continued)

- Available-for-sale

Available-for-sale investments are securities intended to be held for an indefinite period of time, but may be sold in response

to needs for liquidity or changes in interest rates, exchange rates or equity prices. Available-for-sale securities are initially

recognised at fair value plus transaction costs and are continuously re-measured at fair value based on quoted market

prices where available or discounted cash flow models. Fair values for unquoted equity instruments or unlisted securities

are estimated using applicable price/earnings or price/cash flow ratios refined to reflect the specific circumstances of the

issuer. unrealised gains and losses arising from changes in the fair value of securities classified as available-for-sale are

recognised in equity net of applicable deferred tax. When the securities are disposed of, the related accumulated fair value

adjustments are included in other income.

When securities become impaired, the related accumulated fair value adjustments previously recognised in equity are

included in the Statement of Income as an impairment expense on investment securities.

- Held to maturity

Held to maturity investments are financial assets with fixed or determinable payments and fixed maturities that the Bank’s

management has the positive intention and ability to hold to maturity. Held to maturity investments are carried at amortised

cost less any provision for impairment.

iii) Debt securities and other fund raising instruments

Debt securities and other fund raising instruments are recognised initially at fair value net of transaction costs, and

subsequently measured at amortised cost using the effective interest rate method.

f) Impairment of financial assets

The Bank assesses at each reporting date whether there is any objective evidence that a financial asset or group of financial

assets is impaired. A financial asset or group of financial assets is impaired when the carrying value is greater than the recoverable

amount and there is objective evidence of impairment. The recoverable amount is the present value of the future cash flows.

i) Advances

All non-performing and individually significant advances are individually reviewed and specific provisions made for the

impaired portion based on the realisable value of the loan collateral and discounted by the original effective interest rate of

the loan. The provision made is the difference between the loan balance and the discounted value of the collateral. Interest

continues to be accrued at the effective interest rate and is recorded in “interest income”. Individually insignificant loans

with similar characteristics are assessed for impairment.

Regulatory and other loan loss requirements that exceed these amounts are dealt with in the general banking risk

reserve as an appropriation of retained earnings.

When all efforts have been exhausted to recover a non-performing loan, that loan is deemed uncollectible and written

off against the related provision for loan losses.

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f) Impairment of financial assets (continued)

ii) Investment securities

The Bank individually assesses each investment security for objective evidence of impairment. If an impaired instrument

has been renegotiated, interest continues to be accrued at the original effective interest rate on the reduced carrying

amount of the asset and is recorded as part of “interest income”. If the fair value of the instrument increases in a subsequent

year, the impairment loss is reversed through the Statement of Income.

If there is objective evidence that the cost of an available-for-sale equity security may not be recovered, the security is

considered to be impaired. Objective evidence that the cost may not be recovered includes qualitative impairment criteria

as well as a significant or prolonged decline in the fair value below cost. The Bank’s policy considers a significant decline

to be one in which the fair value is below the weighted-average cost by more that 30% and a prolonged decline to be one in

which fair value is below the weighted-average cost for greater than one year. This policy is applied at the individual security

level.

If an available-for-sale equity security is impaired based upon the Bank’s qualitative or quantitative impairment criteria,

any further declines in the fair value at subsequent reporting dates are recognised as impairments. Therefore, at each

reporting period, for an equity security that is determined to be impaired based upon the Bank’s impairment criteria,

an impairment is recognised for the difference between the fair value and the original cost basis, less any previously

recognised impairments.

g) leases

The leases entered by the Bank (lessee) are all operating leases. Operating lease payments are recognised as an expense in the

Statement of Income on a straight line basis over the lease term.

h) Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only

when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be

measured reliably. All other repairs and maintenance are charged to the Statement of Income during the financial period in which

they are incurred.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and

losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of

Income.

leasehold buildings and leased equipment are depreciated over the period of the lease. Depreciation other than on leasehold

buildings and leased equipment is computed on the declining balance method at rates expected to apportion the cost of the

assets over their estimated useful lives as follows:

Buildings 30 to 75 years

Security equipment 10 to 60 years

Computer equipment 5 to 20 years

Furniture, fixtures and other equipment 3 to 60 years

land and work-in-progress are not depreciated.

50





i) Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Bank’s

interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is

measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if

events or changes in circumstances indicate that the carrying value may be impaired.

As at acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the

combination’s synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit, to which

goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss

is recognised.

Where the Bank’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of

the business combination, this gain is recognised immediately in the Statement of Income as a credit to other income.

j) employee benefits

i) Pension obligations

The Bank operates a defined benefit pension plan for qualifying employees. The Plan is funded and the Bank’s contribution

is determined by the independent actuaries. Annually, the Bank’s independent actuaries conduct a valuation exercise to

measure the effect of the employee benefit plan.

The liability recognised in the Statement of Financial Position in respect of the defined benefit pension plan is the present

value of the defined benefit obligation at the reporting date less the fair value of plan assets together with adjustments for

unrecognised actuarial gains and losses and past service costs.

The defined benefit obligation is calculated annually by the independent actuaries using the projected unit credit

method. under this method, the cost of providing pensions is charged to the Statement of Income so as to spread regular

costs over the service lives of employees in accordance with the advice of the actuaries. Actuarial gains and losses are

recognised as income or expense when the cumulative unrecognised actuarial gains or losses exceed 10% of either the

defined benefit obligation or the fair value of the plan assets. These gains or losses are recognised by amortising them over

the weighted average remaining working lifetime of employees.

The above accounting requirement in no way affects the pension plan which continues to be governed by the approved

Trust Deed and Rules and remain under the full control of the appointed Trustees.

The full results of the valuation exercise are disclosed in note 8 to these financial statements.

ii) Profit sharing scheme

The Bank operates an employee profit share scheme in accordance with terms outlined in the Human Resource Policy

Guidelines. The profit share to be distributed to employees each year is based on a specific formula outlined in these

guidelines. Employees are paid profit share in cash. The Bank accounts for the profit share as an expense through the

Statement of Income.

k) Taxation

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of

assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates

(and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related

deferred income tax asset is realised or the deferred income tax liability is settled.

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k) Taxation (continued)

Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the temporary

differences can be utilised.

Income tax payable on profits, based on the applicable tax law in each jurisdiction, is recognised as an expense in the

period in which profits arise. The tax effects of income tax losses available for carry forward are recognised as an asset when it

is probable that future taxable profits will be available against which these losses can be utilised.

l) Statutory reserves

In accordance with the Financial Institutions Act 1995, a minimum of 15% of the current year’s net profit must be transferred to

the Reserve Fund until the amount in the Fund is equal to the paid up Capital of the Bank. This reserve is non-distributable.

m) earnings per stock unit

Data on earnings per stock unit has been computed by dividing the net profit attributable to ordinary stockholders, by the

weighted average number of ordinary stocks in issue during the year. The Bank has no dilutive ordinary stocks.

n) Foreign currency translation

The financial statements are presented in Guyana dollars which is the currency of the primary economic environment in which

the Bank operates (its functional currency).

Monetary assets and liabilities which are denominated in foreign currencies are expressed in Guyana dollars at rates of

exchange ruling at the reporting date. Non monetary assets and liabilities denominated in foreign currencies are translated at

historic rates. All revenue and expenditure transactions denominated in foreign currencies are translated at mid-exchange rates

and the resulting profits and losses on exchange from these trading activities are dealt with in the Statement of Income.

o) Interest income and expense

Interest income and expense are recognised in the Statement of Income for all interest-bearing instruments on an accrual

basis using the effective interest yield method. Interest income includes coupons earned on fixed income investment and

trading securities, accrued discount and premium on treasury bills and other discounted instruments.

p) Dividends

Dividend income is recognised when the right to receive the payment is established.

q) Fee and commission income

unless included in the effective interest calculation, fees and commissions are recognised on an accruals basis as the service is

provided. Fees and commissions not integral to effective interest arising from negotiating, or participating in the negotiation of a

transaction from a third party are recognised on completion of the underlying transaction.

r) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-

maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of

the operating segments of an entity. The Bank has determined the Managing Director as its chief operating decision-maker.

Management considers its banking operation to be a single business unit. All business is conducted in Guyana with the

exception of certain investment activities.

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s) Customers’ liability under acceptances, guarantees, indemnities and letters of credit

These represent the Bank’s potential liability, for which there are equal and offsetting claims against its customers in the event

of a call on these commitments. These amounts are not recorded on the Bank’s Statement of Financial Position but detailed in

Note 24(b) of these financial statements.

t) assets classified as held-for-sale

A non-current asset is classified as held-for-sale when: its carrying amount will be recovered principally through a sale transaction

rather than through continuing use; the asset is available for immediate sale in its present condition; and its sale is highly

probable. Assets classified as held-for-sale are not depreciated or amortised and are carried at the lower of the carrying amount

and fair value less cost to sell.

u) Comparatives

Certain changes in presentation have been made in these financial statements. These changes had no effect on the operating

results, profit after tax or earnings per stock unit of the Bank for the previous year.

3 SIGNIFICaNT aCCOuNTING JuDGeMeNTS aND eSTIMaTeS IN aPPlyING THe BaNK’S aCCOuNTING POlICIeS

Management has made the following judgements in its application of the Bank’s accounting policies which have the most significant

effect on the amounts reported in the financial statements:

Impairment of financial assets

Management makes judgements at each reporting date to determine whether financial assets are impaired. Financial assets

are impaired when the carrying value is greater than the recoverable amount and there is objective evidence of impairment. The

recoverable amount is the present value of the future cash flows.

Inherent provisions on advances (Note 4b)

Inherent provisions on advances are calculated on an estimate of impairment incurred but not reported, existing in assets as at the

reporting date. Estimated impairment incurred is determined by applying against performing loan balances, the average loan default

rates and adjusting this balance for current economic factors that affect loan performance. An anticipated recovery rate (determined

from historical average) is then applied to determine the value that is recoverable. This calculation is computed by product type.

Valuation of investments (Note 5)

The Bank has applied IAS 39 in its classification of investment securities which requires measurement of securities at fair value. For

unquoted equity instruments and unlisted securities, fair values are estimated using price/earnings or price/cash flow ratios which

have been refined to accommodate the specific circumstances of the issuer.

Net pension asset/liability (Note 8)

In conducting valuation exercises to measure the effect of the employee benefit plan, the Bank’s independent actuaries use

judgement and assumptions in determining discount rates, salary increases, NIS ceiling increases, pension increases and the rate

of return on the assets of the Plan. These are detailed in Note 8 – Employee benefits.

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3 SIGNIFICaNT aCCOuNTING JuDGeMeNTS aND eSTIMaTeS IN aPPlyING THe BaNK’S aCCOuNTING POlICIeS (continued)

Goodwill (Note 7)

The Bank’s financial statements include goodwill arising from acquisitions. In accordance with IFRS 3, goodwill was reviewed for

impairment as at September 30, 2012 using the ‘value in use’ method. This requires the use of estimates for determination of future

cash flows expected to arise from each cash-generating unit and an appropriate discount rate to calculate present value.

Deferred taxes (Note 9)

In calculating the provision for deferred taxation, management uses judgement to determine the probability that future taxable profits

will be available to facilitate utilisation of temporary tax differences which may arise.

Premises and equipment (Note 6)

Management exercises judgement in determining whether costs incurred can accrue sufficient future economic benefits to the Bank

to enable the value to be treated as a capital expense. Further judgement is used upon annual review of the residual values and

useful lives of all capital items to determine any necessary adjustments to carrying value.

Computer software

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific

software. These costs are amortised using the reducing balance method over the estimated useful lives (three to five years).

Subsequent expenditure on software assets is capitalised only when there is an increase in the future economic benefits inherent in

the specific assets to which it relates. All other expenditure is expensed as incurred.

4. aDVaNCeS

a) advances

2012

Retail lending Commercial Mortgages Total and Corporate lending

Performing advances 6,727,619 21,212,785 10,548,047 38,488,451

Non-performing advances 5,408 1,178,764 199,424 1,383,596

6,733,027 22,391,549 10,747,471 39,872,047

unearned interest (1,389,174) – – (1,389,174)

Accrued interest – 389,705 51,703 441,408

5,343,853 22,781,254 10,799,174 38,924,281

Allowance for impairment losses - Note 4 (b) (41,952) (200,774) (49,750) (292,476)

Net advances 5,301,901 22,580,480 10,749,424 38,631,805

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4 aDVaNCeS (continued)

a) advances (continued)

2011


Performing advances 5,210,423 19,021,710 8,473,930 32,706,063

Non-performing advances 9,323 996,038 155,811 1,161,172

5,219,746 20,017,748 8,629,741 33,867,235

unearned interest (1,095,393) – – (1,095,393)

Accrued interest – 323,074 24,415 347,489

4,124,353 20,340,822 8,654,156 33,119,331

Allowance for impairment losses - Note 4 (b) (38,884) (208,159) (57,943) (304,986)

Net advances 4,085,469 20,132,663 8,596,213 32,814,345

b) allowance for impairment losses

i) Impairment assessment

The main considerations for the loan impairment assessment include whether any payments of principal or interest

are overdue by more than 90 days or there are any known difficulties in the cash flows of counterparties, credit rating

downgrades, or infringement of the original terms of the contract. The Bank addresses impairment assessment in two

areas: individually assessed allowances and collectively assessed allowances.

Individually assessed allowances

The Bank determines the allowances appropriate for each significant loan or advance. Items considered when determining

allowance amounts include the sustainability of the counterparty’s business plan, its ability to improve performance once a

financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the availability

of other financial support and the realisable value of collateral, and the timing of the expected cash flows. The impairment

losses are evaluated at each reporting date, unless unforeseen circumstances require more immediate attention.

Collectively assessed allowances

Allowances are assessed collectively for losses on loans and advances that are not individually significant (including

residential mortgages and unsecured consumer lending) and for individually significant loans and advances where there

is not yet objective evidence of individual impairment. Allowances are evaluated on each reporting date with each portfolio

receiving a separate review.

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b) allowance for impairment losses (continued)

i) Impairment assessment (continued)

Collectively assessed allowances (continued)

The collective assessment takes account of impairment that is likely to be present in the portfolio even though there is

not yet objective evidence of the impairment in an individual assessment. Impairment losses are estimated by taking into

consideration the following information: historical losses on the portfolio, current economic conditions, the approximate

delay between the time a loss is likely to have been incurred and the time it will be identified as requiring an individually

assessed impairment allowance, and expected receipts and recoveries once impaired. The impairment allowance is then

reviewed by credit management to ensure alignment with the Bank’s overall policy.

Financial guarantees and letters of credit are assessed and provision made in a similar manner as for loans and advances.

ii) Reconciliation of the allowance for impairment losses for loans and advances by class

2012


Balance brought forward (38,884) (208,159) (57,943) (304,986)

Charge-offs and write-offs 87,691 58,941 130 146,762

loan impairment expense 334,118 1,624,519 161,572 2,120,209

loan impairment recoveries (424,877) (1,676,075) (153,509) (2,254,461)

Balance carried forward (41,952) (200,774) (49,750) (292,476)

Individual impairment (7,180) (57,966) (35,845) (100,991)

Collective impairment (34,772) (142,808) (13,905) (191,485)

(41,952) (200,774) (49,750) (292,476)

Gross amount of loans individually determined

to be impaired, before deducting any allowance 5,408 1,178,764 199,424 1,383,596

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b) allowance for impairment losses (continued)

ii) Reconciliation of the allowance for impairment losses for loans and advances by class (continued)

2011


Balance brought forward (38,654) (271,518) (36,273) (346,445)

Charge-offs and write-offs 83,303 133,307 63 216,673

loan impairment expense 284,377 1,479,051 142,634 1,906,062

loan impairment recoveries (367,910) (1,548,999) (164,367) (2,081,276)

Balance carried forward (38,884) (208,159) (57,943) (304,986)

Individual impairment (7,404) (69,382) (44,947) (121,733)

Collective impairment (31,480) (138,777) (12,996) (183,253)

(38,884) (208,159) (57,943) (304,986)

Gross amount of loans individually determined

to be impaired, before deducting any allowance 9,323 996,038 155,811 1,161,172

c) The undiscounted fair value of collateral that the Bank holds relating to loans individually determined to be impaired at

September 30, 2012 amounts to $2,003 million (2011: $1,561 million). The collateral consists of cash, securities and

properties.

d) Collateral realised

During the year, the Bank realised collateral amounting to $19.1 million (2011: $27.1 million).

5 INVeSTMeNT SeCuRITIeS

Available-for-sale

2012 2011

Government securities 1,056,462 2,513,201

State-owned company securities 705,803 418,406

Corporate bonds/debentures 4,175,169 4,235,468

Others 20,000 20,000

Total investment securities 5,957,434 7,187,075

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6 PReMISeS aND eQuIPMeNT

Capital equipment, works in Freehold furniture and 2012 progress premises fittings Total

Cost

At beginning of year 486,140 4,033,897 2,608,461 7,128,498

Additions at cost 366,258 110,760 341,069 818,087

Disposal/transfer of assets (243,964) (65,293) 168,870 (140,387)

608,434 4,079,364 3,118,400 7,806,198

accumulated depreciation

At beginning of year – 362,850 1,789,728 2,152,578

Charge for the year – 68,774 254,061 322,835

Disposal of assets – (23,724) (76,278) (100,002)

– 407,900 1,967,511 2,375,411

Net book value 608,434 3,671,464 1,150,889 5,430,787

Capital equipment, works in Freehold furniture and 2011 progress premises fittings Total

Cost

At beginning of year 502,339 3,352,604 2,490,221 6,345,164

Additions at cost 333,998 338,083 129,271 801,352

Disposal/transfer of assets (350,197) 343,210 (11,031) (18,018)

486,140 4,033,897 2,608,461 7,128,498

accumulated depreciation

At beginning of year – 335,792 1,497,030 1,832,822

Charge for the year – 27,058 307,992 335,050

Disposal of assets – – (15,294) (15,294)

– 362,850 1,789,728 2,152,578

Net book value 486,140 3,671,047 818,733 4,975,920

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6 PReMISeS aND eQuIPMeNT (continued)

Intangible assets

2012 2011

Net book value of purchased software included in

the category equipment, furniture and fittings 220,356 45,648

Capital commitments

2012 2011

Contracts for outstanding capital expenditure not provided for in the financial statements 1,294,998 952,163

Other capital expenditure authorised by the Directors but not yet contracted for 664,577 161,000

7 GOODwIll

2012 2011

Total unimpaired goodwill on acquisition 1,228,222 1,228,222

Impairment testing of goodwill

The residual balance of goodwill arising from business combinations was generated from the acquisition of certain assets and

liabilities of the Guyana National Cooperative Bank. In accordance with IFRS 3, all assets that gave rise to goodwill were reviewed for

impairment at September 30, 2012 using the ‘value in use’ method. Based on the results of this review, no impairment expense was

required.

The following table highlights the goodwill and impairment assumptions:

2012 2011

Discount rate 10% 10%

Cash flow projection term 5 years 5 years

Growth rate (extrapolation period) 6% 6%

In each case, the cash flow projections are based on financial budgets approved by senior management. In addition, the values

assigned to key assumptions reflect past performance.

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8 eMPlOyee BeNeFITS

a) The amounts recognised in the Statement of Financial Position are as follows:

2012 2011

Defined benefit obligation 1,091,600 1,230,600

Fair value of plan assets (965,800) (853,500)

125,800 377,100

unrecognised actuarial (loss)/gain 150,300 (120,800)

Net liability recognised in the Statement of Financial Position 276,100 256,300

b) Changes in the present value of the defined benefit obligation are as follows:

2012 2011

Opening defined benefit obligation 1,230,600 1,158,500

Current service cost 71,200 62,500

Interest cost 67,100 63,200

Members’ contributions 19,700 17,700

Actuarial gains on obligations (271,500) (49,700)

Benefits paid (22,200) (18,400)

Expense allowance (3,300) (3,200)

Closing defined benefit obligation 1,091,600 1,230,600

c) Changes in the fair value of plan assets are as follows:

2012 2011

Opening fair value of plan assets 853,500 751,200

Expected return 61,500 54,400

Actuarial losses (400) (3,500)

Contributions by Bank 57,000 55,300

Members’ contributions 19,700 17,700

Benefits paid (22,200) (18,400)

Expense allowance (3,300) (3,200)

Closing fair value of plan assets 965,800 853,500

60




8 eMPlOyee BeNeFITS (continued)

d) The amounts recognised in the Statement of Income are as follows:

2012 2011

Current service cost 71,200 62,500

Interest on defined benefit obligation 67,100 63,200

Expected return on plan assets (61,500) (54,400)

Amortised net loss – 3,700

Total included in staff costs 76,800 75,000

e) actual return on plan assets

2012 2011

Expected return on plan assets 61,500 54,400

Actuarial gain on plan assets (400) (3,500)

Actual return on plan assets 61,100 50,900

f) experience history

2012 2011

Defined benefit obligation 1,091,600 1,230,600

Plan assets (965,800) (853,500)

Deficit 125,800 377,100

Experience adjustments on plan liabilities (46,500) (49,700)

Experience adjustments on plan assets (400) (3,500)

g) The normal cost, which is the rate of contributions that the Bank would have to pay if there were no surplus or deficit, is 6.8% of

members’ salaries. The current contribution rate of the Bank is 8.8% to enable removal of the deficit.

Had the plan been wound up as of the last actuarial valuation date of October 1, 2011, the assets of the scheme would have

been sufficient to cover its liabilities.

h) The Bank expects to contribute $68.7 million to the plan in the 2013 financial year.

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8 eMPlOyee BeNeFITS (continued)

i) The principal actuarial assumptions used were as follows:

2012 2011

% %

Discount rate 5.50 5.50

Rate of salary increase 5.50 7.00

Expected return on plan assets 7.00 7.00

NIS ceiling rates 5.00 5.00

The expected rate of return on assets is set by reference to estimated long-term returns on assets held by the plan at that date.

Allowance is made for some excess performance from the plan’s equity portfolio.

j) Plan asset allocation as at September 30

2012 2011

% %

Equity securities 19.00 19.00

Debt securities 44.00 51.00

Money market instruments/cash 37.00 30.00

Total 100.00 100.00

The plan does not directly hold any assets of the Bank.

9 DeFeRReD TaX aSSeTS aND lIaBIlITIeS

Components of deferred tax assets and liabilities

a) Deferred tax assets

(Charge)/Credit

Opening Statement Other Closing Balance of Income Comprehensive Balance Income

2011 2012

Pension liability 102,520 7,920 – 110,440

Fee and Commission income 54,425 11,003 – 65,428

156,945 18,923 – 175,868

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9 DeFeRReD TaX aSSeTS aND lIaBIlITIeS (continued)

Components of deferred tax assets and liabilities (continued)

b) Deferred tax liabilities

Credit/(Charge)

Opening Statement Other Closing Balance of Income Comprehensive Balance Income 2011 2012

Premises and equipment 144,950 12,886 – 157,836

unrealised reserve 49,786 – 411 50,197

194,736 12,886 411 208,033

10 OTHeR aSSeTS

2012 2011

Accounts receivable and prepayments 146,684 100,342

Other assets 224,343 440,518

371,027 540,860

11 CuSTOMeRS’ CuRReNT, SaVINGS aND DePOSIT aCCOuNTS

a) Concentration of customers’ current, savings and deposit accounts

2012 2011

State 8,512,746 11,386,666

Corporate and commercial 13,886,753 8,548,516

Personal 74,593,462 66,992,927

Other financial institutions 2,363,422 1,782,911

Other 2,379,951 3,160,600

101,736,334 91,871,620

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11 CuSTOMeRS’ CuRReNT, SaVINGS aND DePOSIT aCCOuNTS (continued)

b) account types

2012 2011

Demand 21,553,242 20,973,561

Savings 72,869,861 63,817,570

Time 7,313,231 7,080,489

101,736,334 91,871,620

12 OTHeR lIaBIlITIeS

2012 2011

Drafts and settlements 971,644 858,737

Accrued expenses 85,233 91,573

Withholding taxes payable 44,996 49,262

Short term payables 68,132 59,000

Deferred income 9,498 9,317

unearned loan origination fees 163,569 136,062

Dividends payable 52,897 41,656

Other 333,731 278,210

1,729,700 1,523,817

13 STaTeD CaPITal

2012 2011

Authorised

300 million ordinary stock units of no par value

Issued and fully paid

300 million ordinary stock units of no par value 300,000 300,000

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14 OTHeR ReSeRVeS

a) Statutory reserves

In accordance with the Financial Institutions Act 1995, a minimum of 15% of the current year’s net profit must be transferred to

the Reserve Fund until the amount in the Fund is equal to the paid up Capital of the Bank. This reserve is non-distributable.

b) Net unrealised gains

This represents the gains and losses arising from re-measurement of available-for-sale investment securities to fair value as

discussed in note 2 (e). This reserve is non-distributable. The significant reduction in 2011 was primarily due to a correction to

the method used in the valuation of an investment.

c) General banking risk reserve

Specific provisions are made for non-performing advances based on the difference between the carrying amount and the

discounted expected cash flows. These provisions are charged through the Statement of Income.

The General Banking Risk Reserve is created as an appropriation of retained earnings, for the difference between the specific

provision and the carrying amount of non-performing advances. The General Banking Risk Reserve serves to enhance the

Bank’s non-distributable capital base.

15 OPeRaTING PROFIT

a) Interest income

2012 2011

Advances 4,311,336 3,751,212

Investment securities 429,593 528,515

liquid assets 942,521 1,384,581

5,683,450 5,664,308

b) Interest expense

2012 2011

Customers’ current, savings and deposit accounts 851,588 889,875

851,588 889,875

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15 OPeRaTING PROFIT (continued)

c) Other income

2012 2011

Credit and related fees 90,000 80,288

Net exchange trading income 1,080,043 1,108,141

loan recoveries 170,879 95,176

Dividends 5,800 5,600

Deposit and related fees 393,398 339,113

Payments and transfers 185,284 162,663

Sale of premises and equipment 2,643 466

Other operating income 1,701 1,548

1,929,748 1,792,995

d) Operating expenses

2012 2011

Staff costs 1,436,849 1,380,167

Staff profit share 183,725 179,940

General administrative expenses 594,593 526,233

Property related expenses 561,228 498,722

Property tax 68,022 59,000

Depreciation expense 322,835 319,756

Communication 79,524 84,373

Advertising and public relations expenses 126,866 137,103

Directors’ fees 15,480 15,490

Auditors’ fees 16,922 16,000

3,406,044 3,216,784

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16 TaXaTION eXPeNSe

Reconciliation

Income taxes in the Statement of Income vary from amounts that would be computed by applying the statutory tax rate for the following

reasons:

2012 2011

Accounting profit 3,221,314 3,175,430

Tax at applicable statutory tax rates (40%) 1,288,526 1,270,172

Tax effect of items that are adjustable in determining taxable profit:

Tax exempt income (134,808) (124,100)

Depreciation 129,134 127,903

Donations 1,778 1,661

Property tax 27,209 23,600

Wear and tear allowance (118,582) (117,333)

Inherent risk (general) provisions 3,292 (780)

loss/(gain) on sale of premises and equipment (1,057) (187)

Defined benefit obligation 7,920 7,880

Deferred fee income 11,003 7,497

Current tax 1,214,415 1,196,313

Deferred tax (6,037) 50,753

Total Taxation 1,208,378 1,247,066

17 RelaTeD PaRTIeS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other

party in making financial or operating decisions. A number of banking transactions are entered into with related parties in the normal

course of business. These transactions are both secured and unsecured and were carried out on commercial terms and conditions,

at market rates.

Outstanding balances

2012 2011

loans, investments and other assets

Republic Bank limited (Parent) 40,951 16,735

Fellow subsidiaries 2,947 816

Directors and key management personnel 45,713 44,396

Other related parties 500,582 523,092

590,193 585,039

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17 RelaTeD PaRTIeS (continued)

Outstanding balances (continued)

No provisions have been made against amounts due from related parties.

2012 2011

Deposits and other liabilities

Cl Financial Group 23,092 233,679

Republic Bank limited (Parent) 1,012,785 506,479

Fellow subsidiaries 14,791 12,450


Other related parties 1,083,562 985,041

2,244,606 1,833,354

Interest and other income



42,221 53,741

Interest and other expense (excluding key management compensation)

Cl Financial Group 5 2

Republic Bank limited (Parent) 76,387 66,434



100,579 93,479

key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities

of the Bank.

Key management compensation

2012 2011

Short-term benefits 64,985 66,222

68




18 RISK MaNaGeMeNT

18.1 Introduction

The Bank’s prudent banking practices are founded on solid risk management. In an effort to keep pace with its dynamic

environment, the Bank has established a comprehensive framework for managing risks, which is continually evolving as the

Bank’s business activities change in response to market, credit, product and other developments.

The basic principles of risk management followed by the Bank include:

- Managing risk within parameters approved by the Board of Directors and Executives;

- Assessing risk initially and then consistently monitoring those risks through their life cycle;

- Abiding by all applicable laws, regulations and governance standards in every country in which we do business;

- Applying high and consistent ethical standards to our relationships with all customers, employees and other

stakeholders; and

- undertaking activities in accordance with fundamental control standards. These controls include the disciplines of

planning, monitoring, segregation, authorisation and approval, recording, safeguarding, reconciliation and valuation.

The Board of Directors has ultimate responsibility for the management of risk within the Bank. Acting with authority

delegated by the Board, the Credit, Audit, Asset and liability Committee and Other Risks Committees, review specific risk

areas.

The Internal Audit function audits Risk Management processes throughout the Bank by examining both the adequacy of

the procedures and the Bank’s compliance with these procedures. Internal Audit discusses the results of all assessments with

Management and reports its findings and recommendations to the Audit Committee.

The Bank’s activities are primarily related to the use of financial instruments. The Bank accepts funds from customers

and seeks to earn above average interest margins by investing in high quality assets such as government and corporate

securities as well as equity investments and seeks to increase these margins by lending for longer periods at higher rates,

while maintaining sufficient liquidity to meet all claims that might fall due.

The main risks arising from the Bank’s financial instruments are credit risk, interest rate and market risk, liquidity risk, foreign

currency risk and operational risk. The Bank reviews and agrees policies for managing each of these risks as follows:

18.2 Credit risk

Credit risk is the potential that a borrower or counterparty will fail to meet its stated obligations in accordance with agreed

terms. The objective of the Bank’s credit risk management function is to maximise the Bank’s risk-adjusted rate of return by

maintaining credit risk exposure within acceptable parameters. The effective management of credit risk is a key element of a

comprehensive approach to risk management and is considered essential to the long-term success of the Bank.

The Bank’s credit risk management process operates on the basis of a hierarchy of discretionary authorities. The Board

has the final authority on all risk management decisions.

The Risk Management unit is accountable for the general management and administration of the Bank’s credit portfolio,

ensuring that lendings are made in accordance with current legislation, sound banking practice and in accordance with the

applicable general policy of the Board of Directors. The Risk Management function is kept separate from and independent of

the business development aspect of the operations.

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18 RISK MaNaGeMeNT (continued)

18.2 Credit risk (continued)

The Bank uses a risk rating system which groups commercial/corporate accounts into various risk categories to facilitate the

management of risk on both an individual account and portfolio basis. For retail lending, loans are individually assessed at

all our branches. Trend indicators are also used to evaluate risk as improving, static or deteriorating. The evaluation of the

risk and trend inform the credit decision and determines the intensity of the monitoring process.

The Bank’s credit control processes emphasise early detection of deterioration and prompt implementation of remedial

action and where it is considered that recovery of the outstanding liability may be doubtful or unduly delayed, such accounts

are transferred from performing to non-performing status.

loan loss provisions are set aside to cover any potential loss in respect of debts that are not performing satisfactorily. A

review of these provisions is conducted quarterly in accordance with established guidelines and recommended provisions

arising out of this review are submitted to the Board for approval. Non-performing debts recommended for write-off are also

reviewed annually and action taken in accordance with prescribed guidelines.

The Bank avoids exposure to undue concentrations of risk by placing limits on the amount of risk accepted from a number

of borrowers engaged in similar business activities, or activities in the same geographic region or with similar economic

features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political

or other conditions. Such risks are controlled and monitored on a revolving basis and subject to an annual or more frequent

review. limits on the level of credit risk by product, industry sector, client and geography are approved by the Board of

Directors.

18.2.1 Maximum exposure to credit risk without taking account of any collateral and other credit enhancements

The table below shows the Bank’s maximum exposure to credit risk:

Gross maximum exposure

2012 2011

Statutory deposit with Bank of Guyana 11,856,323 11,137,660

Due from banks 10,102,855 4,278,720

Treasury bills 40,208,527 40,525,362

Investment interest receivable 70,972 54,631

Investment securities 5,937,434 7,167,075

loans and advances to customers 38,631,805 32,814,345

Total 106,807,916 95,977,793

undrawn commitments 6,677,602 5,500,207

Acceptances – 5,324

Guarantees and indemnities 1,540,787 1,476,460

letters of credit 382,634 568,756

Total 8,601,023 7,550,747

Total credit risk exposure 115,408,939 103,528,540

70






18.2.1 Maximum exposure to credit risk without taking account of any collateral and other credit enhancements

(continued)

Where financial instruments are recorded at fair value the amounts shown above represent the current credit risk

exposure but not the maximum risk exposure that could arise in the future as a result of changes in values.

Collateral and other credit enhancements

The Bank maintains credit risk exposure within acceptable parameters through the use of collateral as a risk-

mitigation tool. The amount and type of collateral required depends on an assessment of the credit risk of the

counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters.

The main types of collateral obtained are cash or securities, charges over real estate properties, inventories and

trade receivables and mortgages over residential properties and chattels. The Bank also obtains guarantees from

parent companies for loans to their subsidiaries.

Management monitors the market value of collateral, requests additional collateral in accordance with the

underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the

allowance for impairment losses.

It is the Bank’s policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to

repay the outstanding claim. In general, the Bank does not occupy repossessed properties for business use. As at

September 30, 2012, $10.3M (2011: $7.5M) in repossessed properties are still in the process of being disposed of.

18.2.2 Risk concentrations of the maximum exposure to credit risk

Concentration of risk is managed by client/counterparty, by geographical region and by industry sector as detailed

in the following tables:

a) Geographical sectors

The Bank’s maximum credit exposure, after taking account of credit loss provisions established but before taking

into account any collateral held or other credit enhancements, can be analysed by the following geographical

regions based on the country of domicile of our counterparties:

2012 2011

Guyana 109,505,439 98,987,869

Trinidad and Tobago 1,934,186 1,651,769

Barbados 538,203 680,887

Eastern Caribbean 1,581,996 1,575,463

united States 1,585,860 255,254

Other Countries 263,255 377,298

115,408,939 103,528,540

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18.2.2 Risk concentrations of the maximum exposure to credit risk (continued)

b) Industry sectors

The following table breaks down the Bank’s maximum credit exposure as categorised by the industry sectors of

our counterparties:

2012 2011

Government and Government Bodies 53,868,383 55,657,201

Financial sector 11,482,414 5,727,908

Energy and mining 1,423,052 266,087

Agriculture 4,544,656 3,660,865

Electricity and water 734,721 905,606

Transport, storage and communication 962,382 1,686,130

Distribution 7,254,912 8,266,419

Real estate 834,083 290,599

Manufacturing 1,974,584 2,612,687

Construction 3,264,551 1,225,563

Hotel and restaurant 131,204 188,998

Personal 23,630,932 18,471,086

Other services 5,303,065 4,569,391

115,408,939 103,528,540

18.2.3 Credit quality per category of financial assets

The Bank has determined that credit risk exposure arises from the following Statement of Financial Position lines:

- Treasury bills and Statutory deposit with Bank of Guyana

- Due from banks

- Advances

- Financial investments

Treasury bills and Statutory deposit with Bank of Guyana

These funds are held with Bank of Guyana and management therefore considers the risk of default to be very low.

These financial assets have therefore been rated as ‘Superior’.

72






18.2.3 Credit quality per category of financial assets (continued)

Balances due from banks

The credit quality of balances due from other banks is assessed by the Bank according to the level of creditworthiness

of the institution in relation to other institutions in the region. The credit quality of these balances has been analysed

into the following categories:

Superior: These institutions have been accorded the highest rating, indicating that the institution’s capacity to

meet its financial commitment on the obligation is extremely strong.

Desirable: These institutions have been accorded the second highest rating, indicating that the institution’s

capacity to meet its financial commitment on the obligation is very strong.

Acceptable: These institutions have been accorded the third highest rating, indicating that the institution’s

capacity to meet its financial commitment is adequate.

The table below illustrates the credit quality for balances due from banks as at September 30:

Superior Desirable acceptable Total

2012 6,229,613 1,476,719 2,396,523 10,102,855

2011 2,594,635 7,767 1,676,318 4,278,720

Loans and advances - Commercial and Corporate

The credit quality of commercial and corporate advances is internally determined from an assessment of the

counterparty based on a combination of factors. These include the level and strength of experience of management,

the track record and level of supervision required for existing facilities of the company, the financial and leverage

position of the borrowing company, the estimated continued profitability of the company and the ability of that

company to service its debts, the stability of the industry within which the company operates and the competitive

advantage held by that company in the market. The overall level of risk thus assessed is assigned a credit score which

indicates the overall quality of the Commercial/Corporate borrowing account. The related scores for commercial and

corporate advances that are neither past due nor impaired are defined as follows:

Superior: These counterparties have strong financial position. Facilities are well secured, and business has

proven track record.

Desirable: These counterparties have good financial position. Facilities are reasonably secured and underlying

business is performing well.

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Loans and advances - Commercial and Corporate (continued)

Acceptable: These counterparties are of average risk with a fair financial position. Business may be new or

industry may be subject to more volatility, and facilities typically have lower levels of security.

Sub-standard: Past due or individually impaired.

The table below illustrates the credit quality of commercial and corporate advances as at September 30:

Neither past due nor impaired

Superior Desirable acceptable Sub-standard Total

2012 65,710 2,007,769 18,964,650 1,542,350 22,580,479

2011 104,814 3,039,232 15,311,675 1,676,942 20,132,663

The following is an aging of facilities classed as sub-standard:

less than 31 to 60 61 to 90 More than Impaired Total 30 days days days 90 days

2012 233,263 75,194 28,114 84,981 1,120,798 1,542,350

2011 204,719 44,188 12,629 488,750 926,656 1,676,942

Loans and advances - Retail loans and Mortgages

These retail loans and mortgages are individually insignificant and are secured by the assets for which these loans

were granted to fund. The following is an aging analysis of these facilities:

Current less than 31 to 60 61 to 90 More than Impaired Total 30 days days days 90 days

2012 14,615,209 1,014,128 181,629 78,552 – 161,807 16,051,325

2011 11,465,274 887,435 183,442 32,748 – 112,783 12,681,682

74







Investment securities

The debt securities within the Bank’s investment security portfolio are exposed to credit risk. The credit quality of

each individual security is internally assessed based on the financial strength, reputation and market position of

the issuing company and the ability of that company to service the debt. The level of credit risk thus assessed and

associated with the security is assigned a risk premium. These premiums are defined as follows:

Superior: Government and Government Guaranteed securities and securities secured by a letter of Comfort

from the Government. These securities are considered risk free.

Desirable: Corporate securities that are current and being serviced in accordance with the terms and conditions

of the underlying agreements. Issuing company has good financial strength and reputation.

Acceptable: Corporate securities that are current and being serviced in accordance with the terms and conditions

of the underlying agreements. Issuing company has fair financial strength and reputation.

Sub-standard: These securities are either more than 90 days in arrears, display indicators of impairment, or have

been restructured in the past financial year.

The table below illustrates the credit quality of debt security investments as at September 30:

Superior Desirable acceptable Sub-standard Total

Financial investments-

available-for-sale

2012 2,519,517 3,417,917 – – 5,937,434

2011 3,823,015 3,344,060 – – 7,167,075

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18.2.4 Carrying amount of financial assets renegotiated that would otherwise have been impaired

The table below shows the carrying amount for renegotiated financial assets, by class as at September 30:

2012 2011

loans and advances to customers

- Retail lending 418 1,308

- Mortgages 38,332 34,544

- Commercial and Corporate lending 1,518,433 1,674,708

Total renegotiated financial assets 1,557,183 1,710,560

18.3 liquidity risk

liquidity risk is defined as the risk that the Bank either does not have sufficient financial resources available to meet all its

obligations and commitments as they fall due, or can access these only at excessive cost.

liquidity management is therefore primarily designed to ensure that funding requirements can be met, including the

replacement of existing funds as they mature or are withdrawn, or to satisfy the demands of customers for additional

borrowings. liquidity management focuses on ensuring that the Bank has sufficient funds to meet all of its obligations.

Two primary sources of funds are used to provide liquidity – retail deposits and the inter-bank market. A substantial portion

of the Bank is funded with “core deposits”. The Bank maintains a core base of retail funds, which can be drawn on to meet

ongoing liquidity needs. Facilities are also established with correspondent banks, which can provide additional liquidity as

conditions demand.

The Asset/liability Committee of the Bank (AlCO) sets targets for daily float, allowable liquid assets and funding

diversification in line with system liquidity trends. While the primary asset used for short-term liquidity management is the

Treasury bill, the Bank also holds significant investments in other Government securities, which can be used for liquidity

support. The Bank continually balances the need for short-term assets, which have lower yields, with the need for higher asset

returns.

18.3.1 analysis of financial liabilities by remaining contractual maturities

The table below summarises the maturity profile of the Bank’s financial liabilities based on contractual undiscounted

repayment obligations, over the remaining life of those liabilities. These balances include interest to be paid over the

remaining life of the liabilities and will therefore be greater than the carrying amounts on the Statement of Financial

Position.

76





18.3 liquidity risk (continued)

18.3.1 analysis of financial liabilities by remaining contractual maturities (continued)

Financial liabilities - on On up to 1 to 5 Over 5Statement of Financial Position demand one year years years Total

As at September 30, 2012

Customers’ current, savings

and deposit accounts 94,423,103 7,308,472 4,759 – 101,736,334

Due to banks 253,897 – – – 253,897

Other liabilities 1,729,700 – – – 1,729,700

Total undiscounted

financial liabilities 2012 96,406,700 7,308,472 4,759 – 103,719,931

As at September 30, 2011


and deposit accounts 84,757,857 7,074,851 38,912 – 91,871,620

Due to banks 137,247 – – – 137,247

Other liabilities 1,432,244 91,573 – – 1,523,817

Total undiscounted

financial liabilities 2011 86,327,348 7,166,424 38,912 – 93,532,684

Financial liabilities - off On up to 1 to 5 Over 5Statement of Financial Position demand one year years years Total

2012

Acceptances – – – – –

Guarantees and indemnities – 22,833 134,070 1,383,883 1,540,786

letters of credit – 382,634 – – 382,634

Total – 405,467 134,070 1,383,883 1,923,420

2011

Acceptances – 5,324 – – 5,324

Guarantees and indemnities – 1,406,839 64,022 5,599 1,476,460

letters of credit – 568,756 – – 568,756

Total – 1,980,919 64,022 5,599 2,050,540

The Bank expects that not all of the contingent liabilities or commitments will be drawn before expiry of the commitments.

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18.4 Market risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market

variables such as interest rates, foreign exchange rates, and equity prices.

18.4.1 Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values

of financial instruments. The Asset/liability Committee of the Bank reviews on a bi-monthly basis the non-credit and

non-operational risks of the Bank. Asset and liability management is a vital part of the risk management process of

the Bank. The mandate of the Committee is to approve strategies for the management of the non-credit risks of the

Bank, including interest rate, foreign exchange, liquidity and market risks.

The primary tools currently in use are gap analysis, interest rate sensitivity analysis and exposure limits for

financial instruments. The limits are defined in terms of amount, term, issuer, depositor and country. The Bank is

committed to refining and defining these tools to be in line with international best practice.

The table below summarises the interest-rate exposure of the Bank’s Statement of Financial Position. Interest

on financial instruments classified as floating is repriced at intervals of less than one year while interest on financial

instruments classified as fixed is fixed until the maturity of the instrument.

An interest rate sensitivity analysis was performed to determine the impact on net profit and equity of a reasonable

possible change in the interest rates prevailing as at September 30, with all other variables held constant. The impact

on net profit is the effect of changes in interest rates on the floating interest rates of financial assets and liabilities. The

impact on net unrealised gains is the effect of changes in interest rates on the fair value of available-for-sale financial

assets. This impact is illustrated on the following table.

Impact on net profit 2012 2011 Increase/decrease Increase in Decrease in Increase in Decrease in

in basis points basis points basis points basis points basis points

G$ Instruments +/- 50 -/+ 364,349 -/+ 319,088

uS$ Instruments +/- 50 -/+ 29,710 -/+ 34,549

Other currency Instruments +/- 50 -/+ 257 -/+ 1,549

Impact on net unrealised gains 2012 2011 Increase/decrease Increase in Decrease in Increase in Decrease in

in basis points basis points basis points basis points basis points

G$ Instruments +/- 50 (7,737) 7,077 (14,308) 14,457

uS$ Instruments +/- 50 (22,004) 22,422 (31,415) 32,125

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18.4 Market risk (continued)

18.4.2 Currency risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange

rates. The Bank’s exposure to the effects of fluctuations in foreign currency exchange rates arises mainly from

its investments. The Bank’s policy is to match the initial net foreign currency investment with funding in the same

currency. The Bank also monitors its foreign currency position for both overnight and intra-day transactions.

Changes in foreign exchange rates affect the Bank’s earnings and equity through differences on the re-translation

of monetary assets and liabilities to Guyana dollars. Such gains or losses are recognised in the Statement of Income.

The principal currencies of the Bank’s investments are uS and Guyana dollars.

The tables below indicate the currencies to which the Bank had significant exposure at September 30, on its non-

trading monetary assets and liabilities and forecast cash flows. The analysis also calculates the effect of a reasonably

possible movement of each currency rate against the Guyana dollar, with all other variables held constant.

2012 GyD TTD uSD uK OTHeR Total

FINaNCIal aSSeTS

Cash 1,221,833 126 95,499 505 3,751 1,321,714

Statutory deposit

with Bank of Guyana 11,856,323 – – – – 11,856,323

Due from banks 7,042,374 2,379 2,983,620 22,093 52,389 10,102,855

Treasury bills 40,208,527 – – – – 40,208,527

Advances 38,013,841 – 617,964 – – 38,631,805

Investment securities 3,464,439 – 2,492,995 – – 5,957,434

Interest receivable 42,190 – 28,782 – – 70,972

TOTal FINaNCIal aSSeTS 101,849,527 2,505 6,218,860 22,598 56,140 108,149,630

FINANCIAl lIABIlITIES

Due to banks – 2,168 151,508 4,191 96,030 253,897


and deposit accounts 95,781,141 – 5,942,028 16,165 – 101,739,334

Interest payable 33,407 – – – – 33,407

TOTal FINaNCIal lIaBIlITIeS 95,814,548 2,168 6,093,536 20,356 96,030 102,026,638

NeT CuRReNCy RISK eXPOSuRe 6,034,979 337 125,324 2,242 (39,890) 6,122,992

Reasonably possible change

in currency rate (%) – 1% 1% 1% 1% –

Effect on profit before tax – 3 1,253 22 (399) 879

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18.4 Market risk (continued)

18.4.2 Currency risk (continued)

2011 GyD TTD uSD uK OTHeR Total

FINaNCIal aSSeTS

Cash 919,981 29 52,622 295 3,036 975,963

Statutory deposit

with Bank of Guyana 11,137,660 – – – – 11,137,660

Due from banks 2,584,322 16,735 1,338,917 34,194 304,552 4,278,720

Treasury bills 40,525,362 – – – – 40,525,362

Advances 32,157,386 – 656,959 – – 32,814,345

Investment securities 4,542,749 – 2,640,613 – – 7,183,362

Interest receivable 21,294 – 33,337 – – 54,631

TOTal FINaNCIal aSSeTS 91,888,754 16,764 4,722,448 34,489 307,588 96,970,043

FINaNCIal lIaBIlITIeS

Due to banks – 2,072 51,731 4,012 79,432 137,247


and deposit accounts 84,944,652 – 6,909,766 17,202 – 91,871,620

Interest payable 33,274 – – – – 33,274

TOTal FINaNCIal lIaBIlITIeS 84,977,926 2,072 6,961,497 21,214 79,432 92,042,141

NeT CuRReNCy RISK eXPOSuRe 6,910,828 14,692 (2,239,049) 13,275 228,156 4,927,902

Reasonably possible change

in currency rate (%) – 1% 1% 1% 1% –

Effect on profit before tax – 147 (22,390) 133 2,282 (19,828)

18.5 Operational Risk

The growing sophistication of the banking industry has made the Bank’s operational risk profile more complex.

Operational risk is inherent to all business activities and is the potential for financial or reputational loss arising from

inadequate or failed internal controls, operational processes or the systems that support them. It includes errors,

omissions, disasters and deliberate acts such as fraud.

The Bank recognises that such risk can never be entirely eliminated and manages the risk through a combination

of systems and procedures to monitor and document transactions. The Bank’s Operational Risk department

oversees this and where appropriate, risk is transferred by the placement of adequate insurance coverage.

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18.5 Operational Risk (continued)

The Bank has developed contingency arrangements and established facilities to support operations in the event of disasters.

Independent checks on operational risk issues are also undertaken by the internal audit function.

19 CaPITal MaNaGeMeNT

The Bank’s policy is to diversify its sources of capital, to allocate capital within the Bank efficiently and to maintain a prudent

relationship between capital resources and the risk of its underlying business. Equity increased by $1,164 million to $10,804 million

during the year under review.

The Bank’s dividend policy is to distribute 40% to 50% of net earnings to stockholders. Similar to the criteria applied in previous

years, the distribution was based on core operating performance. Total proposed distribution based on the results for the financial

year 2012 of $875 million represents 43.5% of core operating profit.

Capital adequacy is monitored by the Bank, employing techniques based on the guidelines developed by the Basle Committee

on Banking Regulations and Supervisory Practice (the Basle Committee), as implemented by the Bank of Guyana for supervisory

purposes. The Basle risk-based capital guidelines require a minimum ratio of core capital (Tier 1) to risk-weighted assets of 4%, with

a minimum total qualifying capital (Tier 2) ratio of 8%. Core capital (Tier 1) comprises mainly shareholders’ equity.

The Bank’s Tier 1 capital at September 30, 2012 is 19.67% (2011 - 19.83%) and its capital adequacy ratio (Tier 2) is 19.84% (2011-

20.03%). At September 30, 2012 the Bank exceeded the minimum levels required.

20 FaIR Value

In accordance with International Financial Reporting Standard No. 7 “Financial Instruments: Disclosures”, the Bank calculates the

estimated fair value of all financial instruments at the reporting date and separately discloses this information where these fair values

are different from net book values.

The Bank’s available-for-sale investments are not actively traded in organised financial markets, and fair value is determined

using discounted cash flow analysis, which requires considerable judgement in interpreting market data and developing estimates.

Accordingly estimates contained herein are not necessarily indicative of the amounts that the Bank could realise in a current market

exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair

values. The fair value information for available-for-sale investments is based on information available to management as at the dates

presented. Management is not aware of any factors that would significantly affect the estimated fair value amounts.

Investments classified as ‘at fair value through profit or loss’ are actively traded in organised markets and fair value is determined

by reference to the market price at year end or on the last trade date prior to year end.

Financial instruments where carrying value is equal to fair value:- Due to their short-term maturity, the carrying value of certain

financial instruments is assumed to approximate their fair values. These include cash and cash equivalents, investment interest

receivable, customers’ deposit accounts, other fund raising instruments, other assets and other liabilities. The Bank is required to

maintain with the Bank of Guyana, statutory reserve balances in relation to deposit liabilities and the carrying value of these reserves

is assumed to equal fair value.

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20 FaIR Value (continued)

Advances are net of specific and other provisions for impairment. The fair values of advances are based on a current yield curve

appropriate for the remaining term to maturity.

The fair values of the floating rate debt securities in issue are based on quoted market prices where available and where not

available are based on a current yield curve appropriate for the remaining term to maturity. For balances due to banks, where the

maturity period is less than one year, the fair value is assumed to equal carrying value. Where the maturity period is in excess of one

year, these are primarily floating rate instruments, the interest rates of which reset with market rates therefore the carrying values are

assumed to equal fair values.

The fair value of fixed rate debt securities carried at amortised cost is estimated by comparing market interest rates when they

were first recognised with current market rates offered for similar financial instruments. The estimated fair value of fixed interest-

bearing deposits is based on discounted cash flows using prevailing money market interest rates for facilities with similar credit risk

and maturity.

The following table summarises the carrying amounts and the fair values of the Bank’s financial assets and liabilities:

2012 Carrying Fair unrecognised value value gain/(loss)

Financial assets

Cash, due from banks and Treasury bills 51,633,096 51,633,096 –

Statutory deposit with Bank of Guyana 11,856,323 11,856,323 –

Investment securities 5,957,434 5,957,434 –

Advances 38,631,805 39,057,001 425,196

Investment interest receivable 70,972 70,972 –

Other financial assets 132,337 132,337 –

Financial liabilities

Due to banks 253,897 253,897 –

Customers’ current, savings and deposit accounts 101,736,334 101,859,272 (122,938)

Accrued interest payable 33,407 33,407 –

Other financial liabilities 253,897 253,897 –

Total unrecognised change in unrealised fair value 302,258

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2011 Carrying Fair unrecognised value value gain/(loss)

Financial assets

Cash, due from banks and Treasury bills 34,624,275 34,624,275 –

Statutory deposit with Bank of Guyana 11,137,660 11,137,660 –

Investment securities 7,187,075 7,187,075 –

Advances 32,814,345 32,960,865 146,520

Investment interest receivable 54,631 54,631 –

Other financial assets 218,182 218,182 –

Financial liabilities

Due to banks 137,247 137,247 –

Customers’ current, savings and deposit accounts 91,871,620 92,006,252 (134,632)

Accrued interest payable 33,274 33,274 –

Other financial liabilities 137,247 137,247 –

Total unrecognised change in unrealised fair value 11,888

20.1 Fair value and fair value hierarchies

20.1.1 Determination of fair value and fair value hierarchies

The Bank uses the following hierarchy for determining and disclosing the fair value of financial instruments by

valuation techniques:

level 1

Included in the level 1 category are financial assets and liabilities that are measured in whole or in part by reference

to published quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted

prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or

regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length

basis.

level 2

Included in the level 2 category are financial assets and liabilities that are measured using a valuation technique

based on assumptions that are supported by prices from observable current market transactions and for which

pricing is obtained via pricing services, but where prices have not been determined in an active market. This

includes financial assets with fair values based on broker quotes, investments in private equity funds with fair values

obtained via fund managers and assets that are valued using the Bank’s own models whereby the majority of

assumptions are market observable.

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20.1 Fair value and fair value hierarchies (continued)

20.1.1 Determination of fair value and fair value hierarchies (continued)

level 3

Included in the level 3 category are financial assets and liabilities that are not quoted as there are no active markets

to determine a price. These financial instruments are held at cost, being the fair value of the consideration paid for

the acquisition of the investment, and are regularly assessed for impairment.

The following table shows an analysis of financial instruments recorded at fair value categorised by hierarchy level.

level 1 level 2 level 3 Total

Financial investments -available-for-sale

2012 1,496,239 4,461,195 – 5,957,434

2011 1,466,282 5,720,793 – 7,187,075

20.1.2 Transfers between level 1 and 2

For the year ended September 30, 2012, no assets were transferred between level 1 and level 2.

20.1.3 Reconciliation of movements in level 3 financial instruments measured at fair value.

For the year ended September 30, 2012, there were no level 3 financial instruments.

21 SeGMeNTal INFORMaTION

21.1 Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-

maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance

of the operating segments of the entity. The Bank has determined the Managing Director as its chief operating decision-maker.

Management considers its banking operation to be a single business unit. All business is conducted in Guyana with the

exception of certain investment activities.

21.2 Geographical Information

The Bank operates only in Guyana but conducts investment and other correspondent banking business in other countries.

The following tables show the distribution of the Bank’s revenues, interest expenses, total assets and total liabilities allocated

based on the location of the customers and assets respectively:

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21 SeGMeNTal INFORMaTION (continued)

21.2 Geographical Information (continued)

Guyana Trinidad Other Total 2012 and Tobago countries

Interest income 5,543,296 20,881 119,273 5,683,450

Interest expense (851,588) – – (851,588)

Net interest income 4,691,708 20,881 119,273 4,831,862

Other income 1,929,748 – – 1,929,748

Net interest and other income 6,621,456 20,881 119,273 6,761,610

Total assets 112,841,539 428,795 2,085,200 115,355,534

Total liabilities 104,297,850 2,168 251,729 104,551,747

2011

Interest income 5,503,728 21,029 139,551 5,664,308

Interest expense (889,875) – – (889,875)

Net interest income 4,613,853 21,029 139,551 4,774,433

Other income 1,792,995 – – 1,792,995

Net interest and other income 6,406,848 21,029 139,551 6,567,428

Total assets 102,064,955 48,406 2,225,920 104,339,281

Total liabilities 94,098,635 2,072 135,175 94,235,882

21.3 Major Customers

There were no revenues deriving from transactions with a single external customer or group of customers that amounted to

10% or more of the Bank’s revenues.

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22 MaTuRITy aNalySIS OF aSSeTS aND lIaBIlITIeS

The table below analyses the assets and liabilities of the Bank based on the remaining period at September 30 to the contractual

maturity date. See Note 18.3 - “liquidity risk” - for an analysis of the financial liabilities based on contractual undiscounted repayment

obligations.

within after Total 2012 12 months 12 months

aSSeTS

Cash 1,321,714 – 1,321,714

Statutory deposit with Bank of Guyana 11,855,752 571 11,856,323

Due from banks 10,102,855 – 10,102,855

Treasury bills 40,208,527 – 40,208,527

Investment interest receivable 28,217 42,755 70,972

Advances 6,586,034 32,045,771 38,631,805

Investment securities 1,232,794 4,724,640 5,957,434

Premises and equipment – 5,430,787 5,430,787

Goodwill – 1,228,222 1,228,222

Deferred tax assets – 175,868 175,868

Other assets 371,027 – 371,027

71,706,920 43,648,614 115,355,534

lIaBIlITIeS

Due to banks 253,897 – 253,897

Customers’ current, savings and deposit accounts 101,731,575 4,759 101,736,334

Net pension liability – 276,100 276,100

Taxation payable 314,276 – 314,276

Deferred tax liabilities – 208,033 208,033

Accrued interest payable 33,407 – 33,407

Other liabilities 1,729,700 – 1,729,700

104,062,855 488,892 104,551,747

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22 MaTuRITy aNalySIS OF aSSeTS aND lIaBIlITIeS (continued)

within after Total 2011 12 months 12 months

aSSeTS

Cash 975,973 – 975,973

Statutory deposit with Bank of Guyana 11,135,906 1,754 11,137,660

Due from banks 4,278,720 – 4,278,720

Treasury bills 40,525,362 – 40,525,362

Investment interest receivable 2,314 52,317 54,631

Advances 7,079,941 25,734,404 32,814,345

Investment securities 1,501,110 5,685,965 7,187,075

Premises and equipment – 4,975,920 4,975,920

Goodwill – 1,228,222 1,228,222

Deferred tax assets – 156,945 156,945

Other assets 540,850 – 540,850

66,040,176 37,835,527 103,875,703

lIaBIlITIeS

Due to banks 137,247 – 137,247

Customers’ current, savings and deposit accounts 91,857,006 14,614 91,871,620

Net pension liability – 256,300 256,300

Taxation payable 218,888 – 218,888

Deferred tax liabilities – 194,736 194,736

Accrued interest payable 33,274 – 33,274

Other liabilities 1,523,817 – 1,523,817

93,770,232 465,650 94,235,882

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23 DIVIDeNDS PaID aND PROPOSeD

2012 2011

Declared and paid during the year

Equity dividends on ordinary stock units:

Final dividend for 2011: $1.92 (2010: $1.92) 575,000 575,000

First dividend for 2012: $0.917 (2011: $0.917) 275,000 275,010

Total dividends paid 850,000 850,010

Proposed for approval at annual General Meeting

(not recognised as a liability as at September 30)

Equity dividends on ordinary stock units:

Final dividend for 2012: $2.00 (2011: $1.92) 600,000 575,000

24 CONTINGeNT lIaBIlITIeS

a) litigation

As at September 30, 2012 there were certain legal proceedings outstanding against the Bank. No provision has been made as

professional advice indicates that it is unlikely that any significant loss will arise or that it would be premature at this stage of the

action to determine that eventuality.

b) Customers’ liability under acceptances, guarantees, indemnities and letters of credit

2012 2011

Acceptances – 5,324

Guarantees and indemnities 1,540,787 1,476,460

letters of credit 382,634 568,756

1,923,421 2,050,540

c) Sectoral information

State 688,474 1,092,222

Corporate and commercial 1,228,963 934,536

Personal 5,984 23,782

1,923,421 2,050,540

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24 CONTINGeNT lIaBIlITIeS (continued)

d) Pledged assets

Below illustrates the distribution of pledged assets in the Bank’s Statement of Financial Position:

Carrying amount Related liability

2012 2011 2012 2011

Statutory deposit 11,856,323 11,137,660 101,736,334 91,871,620

The statutory deposit is provided to the Bank of Guyana at a percentage of deposit liabilities under the Financial Institutions Act

1995.

e) Non-cancellable operating lease commitments

2012 2011

less than one year 14,416 14,416

Between one to five years 6,740 20,996

More than five years 400 560

21,556 35,972

25 eXTeRNal PayMeNT DePOSIT SCHeMe

2012 2011

47,619 47,619

This represents monies received on behalf of customers and deposited in the External Payment Deposit Scheme with the Bank

of Guyana, in accordance with the terms of agreements signed with each customer which specifically exclude the Bank from any

liability.

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Documents

REPUBLIC BANK (GUY ANA) LIMITED ANNU AL REPORT 2012